Standard Deviation
A statistical measure of the distance a quantity is likely to lie from its average value.
In finance, standard deviation is applied to the annual rate of return of an investment, to measure the investment's volatility, or "risk".
The definition is
StdDev(r) = [1/n * (r_{i}  r_{ave})^{2}]^{½}
where the terms r_{i} are actual values of the investment's annual rate of return, taken over several years,
n is the number of values of r_{i} used, and r_{ave} is the average value of the r_{i}.
See the article on modern portfolio theory for more details and some examples.
