Overhedge or underhedge

CFA Level III Portfolio Management
#1

I read the following paragraph and am not sure if it’s correct:

If a short position of Currency A in an A/B forward contract. To roll forward, need to use matched swapàbuy A in spot market and sell A forward. Sell less A (under-hedge) if A is expected to depreciate or Sell more A (over-hedge) if A is expected to appreciate.

My question is if A is expected to depreciate, should I sell more A (over-hedge) in forward market and vice versa?

#2

Your question cannot be answered because you have to state a market view and the manager view.

Overhedge or underhedge when you think you can make money based on your view versus the market view.