The CAPM Is Built on Historic Conditions, Although in Most

question 59

True/False

The CAPM is built on historic conditions, although in most cases we use expected future data in applying it.Because betas used in the CAPM are calculated using expected future data, they are not subject to changes in future volatility.This is one of the strengths of the CAPM.

---

Definitions:

Diet Drug

A medication or supplement intended to help in weight loss by suppressing appetite, increasing metabolism, or preventing fat absorption.

Heart Valve Defects

Abnormalities or impairments in the valves of the heart that can disrupt blood flow, ranging from congenital defects to age-related degeneration.

Negatively Correlated

A statistical relationship between two variables in which one decreases as the other increases, and vice versa.

Bystanders

Individuals who are present at an event or incident but do not take part in it.