Business and Personal Finance Dictionary

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• VARIANCE
  
  Is a measure of volatility, risk, or statistical dispersion. It is the square of the standard deviation. The variance is calculated by: computing the mean of the series then taking the deviation or subtracting the mean from each observation, square the differences or deviations for each observation, and divide the sum of the squared deviations by the number of observations. This computation is the precursor to the standard deviation. The standard deviation is calculated by taking the square root of the variance.
  
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