Candidates were asked here to compare a forward hedge and a money market hedge, and recommend which hedge should be selected. Many answers gained high marks here.

Since a foreign currency receipt (asset) was expected, the money market hedge would create a foreign currency debt (liability) which could be settled by the receipt when it was received. The foreign currency debt had to be converted into a current-value home currency deposit, which could accrue interest until the date of the expected receipt.

The future value of the home currency receipt could then be compared with the home currency value of the forward market receipt. The highest value (we were hedging an asset) would then be recommended.