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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The statement is false. Betas used in the CAPM are calculated based on past data, not expected future data. However, future expected returns and market risk premium are used in applying the CAPM. The CAPM is subject to criticisms for its reliance on historical data and assumptions that may not hold in the future.

The CAPM Is Built on Historic Conditions, Although in Most