If we had two stocks, A and B. Both are selling for $100 in the market. Over the next year, Stock A has an expected rate of return of 5% while stock B has an expected rate of return of 10%. Which stock do you think carries a greater amount of risk? Briefly explain.

To minimize risks, we decide to have a portfolio of several stocks. Should we choose stocks that are more similar or less similar to each other? Explain, in just a few words.