1.       A director of a multinational asks why the company is spending m annually on currency options. How would you explain the value added to the company by such expenditure?

2.       Discuss the advantages of the system of independently floating exchange rates. Does the choice of a floating regime indicate that the authorities do not care about the level of the exchange rate?

3.       Why were European politicians willing to surrender control of monetary policy and face stringent budgetary rules in return for monetary unification?