Business and Personal Finance Dictionary

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• STANDARD DEVIATION
  
  A statistical measure of the extent to which measurements vary from their mean. A quantification of the dispersion for a set of data. For example, if the high temperature each day in one four-day period was 70 degrees, 71 degrees, 69 degrees, and 70 degrees, that four-day period has a mean (average) high temperature of 70 degrees. A second four-day period might have high temperatures of 70 degrees, 60 degrees, 80 degrees, and 70 degrees. That second period also has an average high temperature of 70 degrees. Even though both four-day periods had the same average high temperature, they were quite different. In the first period, the standard deviation is quite small. There is little dispersion. In the second period, the standard deviation is much larger.
  
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