Understanding Standard Deviation in Risk Measurement

As a financial analyst, it is crucial to understand various methods of measuring risk in investment portfolios. One common metric used to assess the risk associated with an investment is 'Standard Deviation'.

In your response, discuss the concept of Standard Deviation as a measure of risk. Explain how it is calculated and its significance in portfolio management. Additionally, provide an example of how Standard Deviation can influence an investor's decision-making process when constructing a portfolio.