1. True or False: the forward price is the price the forward contract buyer needs to pay to the seller to enter the contract. Explain.

2. A trader enters into a SHORT position in a cotton futures contract when the futures price is 50 cents per pound yesterday. The contract is for the delivery of 50,000 pounds. How much does the trader gain or lose totally if the futures price at the end of today is

48.20 cents per pound;

51.30 cents per pound?