The question is in the below

4. A risk-ee one-year bond has a price equal to p, = 1 and a constant payoff equal to Rf 2 1. The riskfree interest rate is therefore Rf 1. a. Using the fundamental pricing equation, show algebraically that for a representative investor with power utility of consumption with risk aversion parameter 1/ and an annual discount factor of 6, the riskfree interest rate must be equal to the expression below (1 point): Rf = 1(a)? 6 ct b. Interpreting the equation above, we can draw conclusions about how real interest rates behave as a function of three dierent inputs: investors' subjective discount factor 6, the rate of annual consumption grth CH1/Ct, and investors' subjective aversion to risk 1/. Explain the realworld intuition as to why each result listed below should occur. (1 point each) i. When people are impatient, risk-free interest rates are high. ii. Risk-free interest rates are high when annual consumption grth is high. iii. Real interest rates are more sensitive to consumption growth when people are more risk averse