1. A stock S with price S_t at time t pays no dividends. If you lend the stock to someone with the agreement that when they return the shares to you they will pay you b% of the final price as a fee for the loan. What is the formula for the value of a forward contract at time t to deliver the stock at time T for a price of K dollars? Assume the riskless interest rate at which you can borrow or lend money is r% for that exact period from t to T.

2. In addition to problem 1. the company will pay a cash dividend of D dollars per share at time T to anyone who owns the share at time t. Show that the value at time t of the forward price of the stock for time T is