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A statistical measurement that quantifies the variation and dispersion within a set of data is called standard deviation. The standard deviation, in finance, is used for measuring the volatility of investment returns over time. An investor can use standard deviation to determine the level of risk involved in an investment. This allows them to assess how frequently and how far their returns differ from the average return. Investors can also use standard deviation to determine if certain stocks present greater risks than others. For example, stock with a higher standard deviation could indicate greater risk or potential rewards.
In addition to its use in financial analysis, standard deviation can be utilized in other business settings such as quality control & manufacturing processes . For example , it can be used to identify sources of variance within production systems – i.e., any factors which may lead to unexpected deviations from expected performance metrics or desired outputs — so that corrective steps may be taken accordingly . Similarly , it is helpful in assessing test results & determining acceptable levels of accuracy ; if too many results are falling outside normal limits then additional review may be necessary before release into public consumption . It is also useful in tracking metrics related to customer service, like call wait times. If there’s high variability it could indicate that there may be underlying issues.