overall

Question 1

future contracts

Answer 1

Futures contracts are designed for specific transactions rather than large groups of transactions. A futures contract to sell, however, would be appropriate to mitigate the exchange rate risk associated with a single receivable.

Question 2

forward contracts

Answer 2

A forward contract to sell a foreign currency at a specific price will hedge the risk that the currency collected in satisfaction of a receivable may have weakened in relation to the dollar at the settlement date. Forward contracts tend to be used for larger groups of transactions (such as a large volume of accounts receivable), while futures contracts hedge a specific transaction.

if Contracts to buy mitigate exchange rate risk of liabilities, not assets.