If markets are truly efficient and in equilibrium:

$($a$)$ all securities would lie on the SML$.$

$($b$)$ any security that plots below the SML would be considered undervalued.

$($c$)$ any security that lies above the SML would be considered overvalued.

$($d$)$ no security would lie on the SML$.$

$($e$)$ None of the above