Asset Valuation and Exposure Factor Impact on Project Risk
Question
You are the project manager of the HGT project in Bluewell Inc.
The project has an asset valued at $125,000 and is subjected to an exposure factor of 25 percent.
What will be the Single Loss Expectancy of this project?
Answers
Explanations
Click on the arrows to vote for the correct answer
A. B. C. D.B.
The Single Loss Expectancy (SLE) of this project will be $31,250
Single Loss Expectancy is a term related to Quantitative Risk Assessment.
It can be defined as the monetary value expected from the occurrence of a risk on an asset.
It is mathematically expressed as follows: Single Loss Expectancy (SLE) = Asset Value (AV) * Exposure Factor (EF) where the Exposure Factor represents the impact of the risk over the asset, or percentage of asset lost.
As an example, if the Asset Value is reduced two third, the exposure factor value is .66
If the asset is completely lost, the Exposure Factor is 1.0
The result is a monetary value in the same unit as the Single Loss Expectancy is expressed.
Therefore, SLE = Asset Value * Exposure Factor = 125,000 * 0.25 = $31,250 Incorrect Answers: A, C, D: These are not SLEs of this project.
The Single Loss Expectancy (SLE) is a risk management term that represents the estimated monetary loss that can result from a single security incident or breach. It is calculated as the product of the asset value and the exposure factor. In this case, the asset value is $125,000, and the exposure factor is 25 percent.
To calculate the SLE, we use the formula:
SLE = Asset value x Exposure factor
Substituting the given values, we get:
SLE = $125,000 x 0.25 SLE = $31,250
Therefore, the correct answer is B. $31,250. This is the estimated monetary loss that can result from a single security incident or breach of the asset valued at $125,000 with an exposure factor of 25 percent.
