The impact of country risk on the Optimal Stock portfolio

(Applied Study in the Iraq Stock Exchange for the period 2005-2015)

A Dissertation Submitted To

The Council Of the College Administration and Economics in Karbala University , As a Partial Fulfillment of the
Requirements for PH.D. Degree In The Financial and Banking Sciences

Presented by

Noor Sabah Hammed Al-Dahan
Under The Supervision

Prof. Dr Hakem Mehsen Al-Robbie Ass.Prof . Dr Methaq Hatef Al-Fatlawy

Abstract As a result of the financial and economic shocks and repeated crises experienced by the global economy in the last decades of the twentieth century and the beginning of the twentieth century atheist and, Faced and facing most countries with a foreign debt of many problems in the debt service and the owner of a big find at the domestic level on the one hand and the outside on the other hand, pushing for more attention to variables and terms very important Consistent with these data, Among the most important of these variables are the country risk and which summarizes the country’s commitments to creditors, and therefore the risk of longer-Faisal on the side of domestic and foreign investment is the main determinant in attracting or avoid those investments based on that variable or indicator (country risk). The advantage of the financial sector are generally higher risks and the large size and number of securities and financial aspects of the investment, which is characterized as an uncertainty in the side returns, so the problem of any investor-centric nature of the securities that it is possible to form through the investor portfolio among a large number of possible investment portfolios and so came the drafting of the study the problem as follows: 1. What are the stocks that make up the optimum investment portfolio in the Iraq Stock Exchange during the years 2005-2015? 2. Does the return and risk of the investment portfolio is characterized by relative stability, optimal in every year for the period 2005 to 2015? 3. Is there a correlation between the country and the impact of the risk of Iraq and between return and risk of 2 the investment portfolio during the optimum period of study? Depending on the study, the problem of the main hypotheses of the study were as follows: 1. similar stocks within the optimal portfolio for each year in the Iraq Stock Exchange. 2. The return and risk in the investment portfolio optimum Iraq Stock Exchange of stability during the period (2005-2015) 3. There is a correlation and significant effect between country risk for Iraq and between return and risk of the investment portfolio during the optimum period of study. This study aims to build an optimal portfolio in the Iraq Stock Exchange for each year of the study identified from 2005 until 2015, and analysis of data each portfolio separately and stocks involved in building the optimal portfolio in a manner simple arrangement. And thus measure the impact based on the evidence of country risk country risk (ICGR) in the optimal investment portfolio expressed as a yield and risk investment portfolio on an annual basis. In order to achieve the main goals of the study, the study was divided into four chapters, which included the first chapter of country risk investment portfolio and the ideal: a knowledge. As part of the second chapter came under some previous systematic study of cognitive efforts address. The third chapter singled side applied to the study, including measuring the impact of country risk in the investment portfolio optimal, came by three Investigation boss, the study concluded that a set of conclusions that emerged from the study and in the light of which were drafted a number of recommendations were formulating it all in the fourth quarter.