Assume the risk-free rate of interest is 5% and the expected return on the market is 12%. If you are evaluating a project with a beta of 1.3 and an IRR of 17%, and you draw the security market line (SML) to guide your decision, which of the following statements is true?

a. The vertical intercept of the SML will be 7%.

b. The projects IRR of 17% falls on the SML.

c. The projects IRR of 17% falls below the SML and the project should be rejected.

d. The projects IRR of 17% falls above the SML and the project should be accepted.

e. The expected return on the market will graph on the SML corresponding with the beta of 1.3.