Article 1- Title The Journal For Business Name of the Journal:Risk Reduction and portfolio analysis

How the article is structured? The article is structured in such a way that it discuss the mentality of investor to either decide on the size of portfolio he will hold making the tradeoff between the decreased risk due to diversification. Also it analyzes the relationship

between number and type of securities is necessary to see the effects on introducing new securities into population of securities under study. Also it examines the past studies done on the specific field.

What are the variables taken in that study?

Risk of portfolio and number of securities

Why such variables are taken (literature review)? In the article Risk is taken as the function of Characteristic of population of stock from which portfolios are selected. First We look into Evan and Archer method where they measured the risk of a portfolio by the SD of the return from the average return of that portfolio . Then a large scale simulation is ran and plotted the average SD of return from the average return for that portfolio. Finally the confidence interval on SD of return is found out. In the present study an analytical

expression is created for the relationship between portfolio size and risk .This helps to clearly explicit what factors influence the effect of portfolio size on risk and the relative importance of each other. We also use simulation to identify the risk Fisher and Lorie simulate the distribution of returns for various portfolio sizes for all the stocks listed and the calculated the distribution of all possible portfolio outcomes their results are directly analogous to measure of total risk. Here the investments in all securities in the portfolio are of equal. Equal investment is optimum if the investor has no information about future returns variances and covariances. Also an analytical relation-ship between the average variance of a portfolio's return and the size of the portfolio. Then an expression is developed to measure the additional risk due to the probability that the mean return on the portfolio will differ from the mean return on the market. Two sets of expressions will be developed, one based on the full variance covariance matrix and one based on the Sharpe simplification. Also a formula is derived that exactly

measure the effect of the number of securities on investor's risk as well as approximations using the Sharpe single index model.

What is methodology adopted?

a) How sample size is determined?

b) What is tool used for analysis?

What are the findings? Risk is the function of Characteristic of population of stock from which portfolios are selected. To the extent that future returns variances and covariances can be forecast, it is possible that buying unequal amounts of each investment can lead to further reduction of risk for any size portfolio.. When an in-vestor decides on the size of the portfolio he will hold, he is making a trade-off between the decreased risk due to more effective diversification versus the increased transaction costs (decreased return) from adding more securities to his portfolio. the relationship between risk and the number and type of securities is necessary to see the effects on risk of introducing new securities into the population of securities under study a formula is derived that exactly measure the effect of the number of securities on investor's risk as well as approximations using the Sharpe single index model.

 Equal investment is optimum if the investor has no information about future returns variances and covariances. Approximations seem to be very good when estimating expected variance and total risk but much cruder in estimating variance in variance What is the scope for future research? In the research the risk factor is considered where equal investments is made in each securities the case where uneven investments are made have to be expanded.