lcai

janakisri Wrote:
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> 2nd one would be synthetic cash as well. You are
> short the futures . Your assumption is that the
> full notional value of the trade is invested in
> T-Bills and earns a risk free rate. This
> assumption should be true in any futures trade


By using the second formula, the number of futures you will buy will be smaller than the number of futures you will buy by using the first formula. The difference is the risk free rate. Try it. Do the calculation.