Pick one stock. Use its beta to compute its "expected return" assuming CAPM. For CAPM, use the risk$-$free return $($Rf$)$ of $5\mathrm{.}24\%$ and the market return $($Rm$)$ of $22\mathrm{.}28\%.$ The risk$-$free rate is the $3-$month T$-$Bill rate. The market return is based on the latest S&P $500$ Index value of $4,759\mathrm{.}06$ in $2024$ and the value of $3,892\mathrm{.}09$ a year ago, so market return $=4,759\mathrm{.}06/3,892\mathrm{.}09-1=22\mathrm{.}28\%.$

Expected return $=$ Risk free return $+$ beta $*($market return $-$ risk free return$)=5\mathrm{.}24\%+$ beta $*(22\mathrm{.}28\%-5\mathrm{.}24\%)$

Given: risk free return $=5\mathrm{.}24\%,$ market return $=22\mathrm{.}28\%$

Then, generate the stock's historical stock prices and compute its latest "actual return" $($based on adj. close price$).$

Actual return $=$ ending adj. close price $/$ beginning adj. close price $1$

Compare its "actual return" to the "expected return" to see if the stock is on$,$ above, or below the Security Market Line $($SML$).$