The expected return on Coca-Cola stocks is 3.2 percent and its beta is 0.35. The expected return on Tesla stocks is 5.1 percent and its beta is 1.28.

a. Assuming that all assets are on the security market line, using above information draw the security market line.

b. What is the risk-free rate?

c. What is the market risk premium?

d. What is the market expected return?

e. Your company is operating in the real estate industry and the beta of similar firms is 0.72. Of the company is planning to invest in a new project, what is the appropriate interest rate that should be used in calculating this projects NPV?