Estimated Threat Frequency

D.

The term related to risk management that represents the estimated frequency at which a threat is expected to occur is the Annualized Rate of Occurrence (ARO).

ARO is a key component in calculating the Annual Loss Expectancy (ALE) for a particular threat or risk scenario. It represents the expected number of times that a specific threat or risk scenario is expected to occur within a year.

The formula for calculating ALE is: ALE = ARO x SLE

Where SLE is the Single Loss Expectancy, which represents the expected monetary loss each time a specific threat or risk scenario occurs.

For example, if the ARO for a specific threat is estimated to be 0.5 (i.e., the threat is expected to occur on average once every two years) and the SLE for that threat is $10,000, the ALE for that threat would be:

ALE = 0.5 x $10,000 = $5,000

This means that on average, the organization can expect to lose $5,000 per year due to this specific threat.

In contrast to ARO, a safeguard is a measure implemented to mitigate or reduce the risk associated with a particular threat. For example, implementing a firewall to reduce the risk of a network breach. Exposure Factor (EF) represents the percentage of asset loss that would occur if a specific threat is realized. For example, if a fire destroys 50% of an organization's servers, the EF for that threat would be 50%.