This is what I think is going on. Okay, there's time here. Okay, and we're talking about six months. And she's thinking about a six month treasury. So the underlying security we're dealing with here is a six month treasury bill. And we're thinking about time zero. Okay, what is a treasure bill? A treasure bill is a promise to pay a certain amount of money six months from now, and there's no coupon payments or anything like that in the middle to worry about, okay? She then says, let's suppose we buy this treasury bill and we borrow money against it, we do a three month repo to finance it. Okay, so if we do that, okay, so we're borrowing short and we're lending long, okay. So maybe we expect to make some money doing that. But we do face some price risk because at the end of three months this treasury bill is going to have some value, okay. It's going to then be a three month treasury bill. But it's going to have some value. And it may be higher or it may be lower than what we have to pay back the repo and so we're facing some danger here. But we could protect ourselves by doing a short future's position Okay, so that, if the thing falls in value, okay we win. Okay, we're short. So, I'm showing long positions above the line and short positions below the line. So repo is borrowing, so it's short And this just a short future's position here. Okay, now the reason this is and then she does, she says, okay so fine let's do all of this and then let's calculate the profit that comes from this. Okay, but why should there be any profit that comes from this? Okay, because you've just gotten rid of, you have a long position and you have an equal and opposite short position and they should cancel. And, why is there any profit here, at all, okay. And yet, apparently, sometimes there is. Let's think about this in a way that now, connects up with the lecture a little bit more. If you think about a wrong position a treasure bill and sure position in a repo like this okay, this is actually a forward contract. This is a synthetic forward contract because we saw it on the balance sheet right, when you have six month loan and a three month deposit. Okay, that's sort of what you have here, so this is really like Long forward, and short futures. For the same term, okay. But that doesn't help us because once again, well that just says shouldn't these things be the same price? And if they are, there will be no arbitrage profit. So this, again, points to this problem here, okay? That there's a wedge, And we need to understand what that wedge is. Empirically there seems to be a wedge. What is the source of that wedge? So let's use some of our formulas here. So this is our futures formula here. If this formula held Okay, if that held, okay, there would be no profit, okay? So this is full carry pricing. She called this full carry pricing. Okay, if it doesn't hold, it's like that, okay? Here's the cash and carry arbitrage. And I guess for completion you could say if it went the other way. It would be reverse cash and carry. Okay, say if it's like this, okay, then long forward, short future's you make money. Cash and carry arbitrage, okay. If it's like this you just want to reverse that. You want to be short forwards and long futures, okay, in order to do that. Okay, this still doesn't explain anything, okay. But we're starting to at least throw some numbers at it. Throw some quantitative stuff at it. Another way that she tries to talk about this is by referring to something called the implied repo rate. I puzzled over this for a long time, okay? What is the implied repo rate? The implied repo rate is the interest rate that would make full carry pricing true, when it's not actually true with the actual, okay. So we can define the implied repo rate Is rho. Rho is the Greek R, okay. And it just is defined by that equation here where we used rho instead of, okay. So if we used, if we let that be so, if we define rho in that way, you can see just by here that this is a case where row is greater than r, there's a case where row is less than r. Just by substituting in the definition here, and seeing that we have the STs are the same, the Ts are the same. The only thing that is different are the rhos and the rs, okay. So now that gives us another idea, okay. So cash and carry arbitrage is like borrowing at the actual interest rate and lending at the implied repo rate. So it's like borrowing it at one rate and lending it a little bit higher rate, okay. So it's like an interest rate spread. It's an interest rate spread here that we're doing. I don't know. More algebra, more quantitative. Still why would it be greater from this? What's the issue?