# Standard Deviation Essential terms you should know.

## Standard Deviation A Term You Need to Know

The standard deviation is a measure of the variability or spread of a data set. It indicates how much the individual observations in a data set deviate from the mean of the data set. The standard deviation is expressed in the same units as the data set, and a smaller standard deviation indicates that the data values are clustered closely around the mean, while a larger standard deviation indicates that the values are more dispersed.

To calculate the standard deviation, first the mean of the data set must be found. Then, for each value in the data set, the difference between the value and the mean is calculated and squared. The sum of these squared differences is divided by the number of observations in the data set (n) to find the variance. The square root of the variance is then taken to find the standard deviation.

The standard deviation is an important statistical measure that is used in many areas of research, including finance, economics, biology, and psychology. It is used to describe the distribution of data, to make inferences about population parameters, and to perform hypothesis tests. The standard deviation is also used as a benchmark to determine whether a value is an outlier or not.