Proper Way to Quantify Total Monetary Damage from Exploited Vulnerability

A.

The proper way to quantify the total monetary damage resulting from an exploited vulnerability is to calculate the Annualized Loss Expectancy (ALE).

ALE is a risk management metric that calculates the expected monetary loss from a risk over a one-year period. It takes into account the probability of a threat occurring (Annualized Rate of Occurrence or ARO) and the estimated cost of the impact of the threat (Single Loss Expectancy or SLE).

To calculate ALE, multiply the ARO by the SLE. The formula for ALE is:

ALE = ARO x SLE

ARO is the probability that a threat will occur in a given year, while SLE is the estimated cost of a single occurrence of the threat. The result of the ALE calculation provides an estimate of the total cost of the risk over a one-year period.

ARO is calculated by dividing the number of occurrences of the threat in a year by the total number of opportunities for the threat to occur in that same year. SLE is the estimated cost of a single occurrence of the threat.

MTBF (Mean Time Between Failures) is a metric used to measure the reliability of a system or component, and TCO (Total Cost of Ownership) is a metric used to calculate the total cost of owning and operating a system or component over its lifetime. These metrics are not relevant for calculating the total monetary damage resulting from an exploited vulnerability.