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The psreports folder generally is set outside of PS_HOME for security reasons. Besides that; it is illogical to store reports ouput in a folder where PeopleSoft binaries reside.
It doesn't require specific changes in the URL, since the URL is just a pointer to the location which is specified in the configuration.properties of the webserver. If you change the location you have to specify the new location in the configuration.properties of the webserver (or if you have specified it on the webprofile level; on the webprofile page).