The role of beta coefficient in constructing optimal portfolio Applied study about sample of companies listed in Iraq stock exchange

Abstract

This research Concern with the most sophisticated theories in financial investment, they are portfolio theory of (Markowitz) and capital Assets pricing Model (CAPM) by analyzing the core component in (CAPM) that is the (Beta) which reflect and diagnose the systematic risk in financial assets, and summarizing it as the volatility of the returns of the financial assets compared with the market returns and with connection it. This can declare the risk that inherent in. Then give the investor the best imagination about the risks and returns of that asset. That enables him to take his best investing decision on scientific bases. Our research links between portfolio theory, (CAPM), Capital market line (CML), and security market line (SML), through the concept of (optimal portfolio) declares the importance of (Beta) and its role in financial investment.