Consider a large Australian cotton farmer who has just planted her crop. Once grown, she plans to export her production to China. (a) Explain how each of the following scenarios can affect her revenue: (i) A decrease in U.S. production (the U.S. is a large exporter of cotton to China) (ii) A depreciation in the USD/AUD exchange rate (iii) An economic recession in China (b) Do you think she'll buy back thesame futures contract prior to expiry? Why/why not? (c) Which of the scenarios in (a) will no longer affect her now that she's gone short?

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