Standard deviation σ = √(σ²) is square root of variance. Units same as original data (unlike variance). Interpretation: ~68% data within ±1σ, ~95% within ±2σ, ~99.7% within ±3σ (normal distribution). For grouped data: σ = √[Σ(f(xi-x̄)²)/n]. Example: {2, 4, 6, 8}. Variance = 5, σ = √5 ≈ 2.24. Coefficient of variation CV = (σ/x̄) × 100%. Compares relative variability. Portfolio A: mean return 10%, σ = 2 (CV=20%). Portfolio B: mean return 15%, σ = 3 (CV=20%). Same relative risk despite different absolute values. Solving: Calculate mean, deviations, squared deviations, variance, then σ. Use CV to compare spread across different scales. Exam tip: Memorize empirical rule percentages. Understand σ interpretation in context.