9. An investor needs a financial incentive to take a risk. The expected return on a risky investment (R) must exceed the return on a risk-free investment (Rf). In practice, the risk-free return is often taken to be the rate of interest on short-term U.S. government debt. The expected excess return on a risky investment is given by RRf. According to the capital asset pricing model (CAPM), the expected excess return on an asset is proportional to the expected excess return on a portfolio of all available assets (market portfolio). This model is given below: RRf=(RmRf)+u where Rm is the expected return on the market portfolio. a. Suppose >1. Compare the return on R with the market portfolio. Explain. b. Suppose >1. Show that Var(RRf)>Var(RmRf). c. Suppose Var(RmRf) ? 9. An investor needs a financial incentive to take a risk. The expected return on a risky investment (R) must exceed the return on a risk-free investment (Rf). In practice, the risk-free return is often taken to be the rate of interest on short-term U.S. government debt. The expected excess return on a risky investment is given by RRf. According to the capital asset pricing model (CAPM), the expected excess return on an asset is proportional to the expected excess return on a portfolio of all available assets (market portfolio). This model is given below: RRf=(RmRf)+u where Rm is the expected return on the market portfolio. a. Suppose >1. Compare the return on R with the market portfolio. Explain. b. Suppose >1. Show that Var(RRf)>Var(RmRf). c. Suppose Var(RmRf)