The most common measures of dispersion are the variance and the standard deviation. These two measures indicate how data are scattered about the mean. However, the unit of variance is the square of the units being observed, which makes it an impractical measure to interpret. For example, if distances measured in meters are analyzed, the variance is measured in meters squared. As a result, you would generally choose to calculate the standard deviation because it represents the average distance each observation is from the mean. oland o represent variance and standard deviation population parameters, while s? and s represent sample statistics. Sample Variance and Standard Deviation For a sample with n observations, variance and standard deviation are calculated as follows: Another stock has had the following returns over the last five years: 8 13 17 20 22 Their mean is and n = 5. The coefficient of variation, the amount of risk per unit of the mean, is found by dividing the standard deviation by the mean, as follows: CV = Standard Deviation/Mean Check Your Understanding A vehicle's fuel efficiency is being tested. Four trials yielded the following fuel efficiencies (in miles per gallon): 24.8 25.3 29.1 26.4 The mean fuel efficiency is 26.4 miles per gallon. The data from this fuel efficiency test represents a The variance of these test results is and the standard deviation is The coefficient of variation for the fuel efficiency results is