A stock lending transaction can be seen as collateralized borrowing. One lends shares in exchange for cash. One typically pays a lower interest rate on this cash borrowing than one would if one borrowed the cash without collateral If the risk-free rate of interest is r for uncollateralized borrowing and the rate of interest on borrowing collateralized by the shares is -b then b is called the borrow cost. Assume, that both rates are quoted as continuously compounded. Find a formula for the fair forward price of a stock with price S at time T. Assume that the stock does not pay any dividends between now and T. F= Describe the arbitrage arguments that imply this forward price. Long Forward Contract Today Time T Short Forward Contract Today Time T