Suppose Starbucks has an inventory of about 1,000,000 pounds of coffee, valued at $3 per pound. Starbucks fears that the price of coffee will fall in the short run and wants to protect that value of its inventory. Starbucks decides to sell 26 futures contracts that cover 975,000 pounds at $3 per pound. (1) One month later, the price of coffee dropped to $2.88 per pound, whats total loss of Starbucks? (2) One month later, the price of coffee increased to $3.15 per pound, whats the total gain of Starbucks? (3) Which of the two has a higher volatility: value of coffee per pound, or the total value of inventory and futures contracts?