2. A trader enters into a long cotton futures contract when the futures price is 80 cents per pound. The contract is for the delivery of 50,000 pounds.

   1. How much does the trader gain or lose if the cotton price at the end of the contract is 67.50 cents per pound.

   2. How much does the trader gain or lose if the cotton price at the end of the contract is 97.80 cents per pound.

   3. Describe someone who might use a long cotton futures contract as a hedge position.