"My horse is brown."
Translation:Το άλογό μου είναι καφέ.
Yes, it means both the color and the coffee we drink and I'm assuming it's called καφέ because it is καφέ.
I put 'kastani' . isn't there a word something like that, that means brown
The second accent is used to make the pronunciation of the sentence smoother. When, as in this case, there is a word that is accented on one of the first syllables and a short unaccented word follows we add an accent to the long word to make it sound better. So that "άλογό μου" sounds almost like one word.
If you didn't have both accents Duo will say you have a typo but your sentence will be accepted as correct.
The multiple choice says καφετι. I think this new version of the site needs some tweaking.