Variance is a measure of the variability of returns, and since it involves squaring the deviation of each actual return from the expected return, it is always larger than its square root, its standard deviation.

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Variance involves squaring the deviation of each actual return from the expected return, resulting in a larger value than its standard deviation, which is the square root of variance. Therefore, variance is always larger than its square root, the standard deviation.

Variance Is a Measure of the Variability of Returns, and Since