An investor is considering to buy stock in either Tesla Inc. or Volkswagen. Tesla earned a stock return of 10.8% last year, while Volkswagen earned a stock return of 6.5%. The risk-free rate is 2% and the market risk premium is 6%. The investor incorrectly believes that expected returns are based on the CAPM model, when in fact they are based on the Fama-French 3-factor model: E[r] = r_f+ (E[r_m] - r_f) +SMB +HML, where SMB is 3.5% annually and HML is 1.9%.

Choose values of, ,andfor both Tesla and Volkswagen such that Volkswagen has a higher alpha based on the CAPM model, but Tesla has a higher alpha based on the 3-factor model.