The Treasury bill rate is 2% and the expected return on the market portfolio is 10%. The standard deviation of the return on the market portfolio is 20%.

Stock A has an expected return of 17% and a volatility of 55%. Assume that the stock is correctly priced according to the CAPM.

A project has an IRR of 13%, a beta of 1.6 and a downward-sloping NPV function. Does the project lie above, on, or below the Security Market Line (SML)?