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It starts the function wizard to enable you to easily pick a function that you want to use in a formula. It will present you with a list of functions and function categories and allow you to choose the one you want and show you the elements that it needs. It appears on the standard toolbar and also on the formula bar. It is useful if you are not familiar with a particular function and how to use it.

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Q: What is the purpose of the fx button in Excel?
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