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Lambda expressions in Java allow code to be treated as data, enhancing code readability and conciseness, particularly when replacing anonymous classes implementing functional interfaces. A functional interface contains a single abstract method, enabling efficient use of lambda expressions, which can include parameters and return values. Examples illustrate how lambdas can simplify comparator implementations and perform operations like squaring or cubing numbers, while emphasizing syntactical nuances such as the need for curly braces in certain contexts.

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