If you can only answer one question, please answer part b. Thanks so much.

4. Here are data on two companies. The T-bill rate is 4% and the market risk premium is 6%. $1 Discount Store Everything $5 Company Forecast return 12 % 11 % Standard deviation of returns 8 % 10 % Beta 1.5 1.0 a. What would be the expected rate of return for each company, according to the capital asset pricing model (CAPM)? | b. Based on the fair return and according to the capital asset pricing model (CAPM), is each firm properly priced? Plot an SML line