An asset with a value of $600,000 is subject to a successful malicious attack threat twice a year.
The asset has an exposure of 30 percent to the threat.
What will be the annualized loss expectancy?
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A. B. C. D.Answer: C, B, and D are incorrect.
These are not valid answers.
The annualized loss expectancy will be $360,000
Annualized loss expectancy (ALE) is the annually expected financial loss to an organization from a threat.
The annualized loss expectancy (ALE) is the product of the annual rate of occurrence (ARO) and the single loss expectancy (SLE)
It is mathematically expressed as follows: ALE = Single Loss Expectancy (SLE) * Annualized Rate of Occurrence (ARO) Here, it is as follows: SLE = Asset value * EF (Exposure factor) = 600,000 * (30/100) = 600,000 * 0.30 = 180,000 ALE = SLE * ARO - = 180,000 * 2 = 360,000
Annualized loss expectancy (ALE) is a term used in risk management that represents the expected monetary loss from a risk over a year. To calculate ALE, we need to multiply the annual rate of occurrence (ARO) of a threat with its single loss expectancy (SLE).
In this case, we are given that:
We can use this information to calculate the single loss expectancy (SLE) as follows:
SLE = Asset Value × Exposure Factor = $600,000 × 0.3 = $180,000
The exposure factor of 0.3 represents the percentage of the asset's value that is expected to be lost due to the threat.
Next, we need to calculate the annual rate of occurrence (ARO) of the threat. We are given that the asset is subject to the threat twice a year. So, the ARO would be:
ARO = 1 / Frequency of Occurrence = 1 / 0.5 = 2
We divide 1 by the frequency of occurrence (twice a year) to get the ARO.
Finally, we can calculate the annualized loss expectancy (ALE) using the formula:
ALE = SLE × ARO = $180,000 × 2 = $360,000
Therefore, the answer is option A: $360,000.