1. Explain why an American option is always worth at least as much as a European option on the same asset with the same strike price and exercise date.
2. Explain why an American option is always worth at least as much as its intrinsic value.
3. Explain carefully the difference between writing a put option and buying a call option.
4. The treasurer of a corporation is trying to choose between options and forward contracts to hedge the corporation's foreign exchange risk. Discuss the advantages and disadvantages of each.