Cisco Certified Support Technician (CCST) CybersecurityRisk ManagementMedium
A security analyst is conducting a quantitative risk assessment for a critical web application. They determine that a successful denial-of-service (DoS) attack would cost approximately $50,000 in lost revenue and recovery efforts. Historical data suggests there is a 10% chance of such an attack occurring in a given year. What is the Annualized Loss Expectancy (ALE) for this specific risk?
- A$500,000
- B$5,000
- C$500
- D$50,000
Show answer & explanationAnswer & explanation
Correct answer: B. $5,000
The Annualized Loss Expectancy (ALE) is calculated by multiplying the Single Loss Expectancy (SLE) by the Annualized Rate of Occurrence (ARO). In this case, SLE = $50,000 and ARO = 0.10 (10%), so ALE = $50,000 * 0.10 = $5,000.
Why the other options are wrong
- A. This would be SLE * 10, incorrect ARO.
- C. This would be SLE * 0.01, incorrect ARO.
- D. This is the Single Loss Expectancy (SLE), not ALE.
Annualized Loss Expectancy (ALE)
A quantitative risk assessment metric that represents the projected annual financial loss from a specific risk. It is calculated as Single Loss Expectancy (SLE) multiplied by Annualized Rate of Occurrence (ARO).
- Quantitative risk metric.
- ALE = SLE * ARO.
- Helps prioritize risk mitigation investments.
Memory trick: SLEEP and AROUSE to calculate ALE.