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.

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Definitions:

Post-Employment Plans

Financial arrangements made by employers to provide employees with benefits after retirement, such as pensions.

Accumulating Non-Vesting

Benefits or rights that accumulate over time in favor of an employee, which are not lost despite not meeting certain vesting criteria.

Long Service Leave

An employee benefit that provides paid leave for employees who have served a particular period of time with the same employer or industry.

Annual Leave

Paid time off work granted by employers to employees to be used for personal activities.