Cisco Certified Support Technician (CCST) CybersecurityRisk ManagementMedium
During a quantitative risk assessment, an organization determines that the Single Loss Expectancy (SLE) for a particular server outage is $5,000. If the Annualized Rate of Occurrence (ARO) for this type of outage is estimated to be 0.5 (meaning it occurs once every two years), what is the Annualized Loss Expectancy (ALE) for this server outage?
- A$10,000
- B$5,000
- C$25,000
- D$2,500
Show answer & explanationAnswer & explanation
Correct answer: D. $2,500
The Annualized Loss Expectancy (ALE) is calculated by multiplying the Single Loss Expectancy (SLE) by the Annualized Rate of Occurrence (ARO). So, ALE = $5,000 * 0.5 = $2,500.
Why the other options are wrong
- A. This would be SLE / ARO, which is incorrect.
- B. This would be the SLE, not the ALE.
- C. This calculation does not align with the ALE formula.
Annualized Loss Expectancy (ALE)
The expected monetary loss for an asset or a set of assets over a one-year period.
- Calculated as SLE * ARO.
- Used in quantitative risk assessment.
- Helps prioritize risks based on financial impact.
Memory trick: SLE is one loss, ARO is how often, ALE is total annual cost.