Question

Tonya is performing a quantitative risk assessment for a piece of software. The single loss expectancy (SLE) is $500, and the associated annual rate of occurrence (ARO) is 3. What is the annual loss expectancy (ALE)

Answer 1

The annual loss expectancy (ALE) is:

= $1,500.

Step-by-step explanation:

a) Data and Calculations:

Single loss expectancy (SLE) = $500

Annual rate of occurrence (ARO) = 3

Therefore, the annual loss expectancy (ALE) = SLE * ARO

= $500 * 3

= $1,500

b) The Annual Loss Expectancy is calculated by multiplying the annual rate of occurrence (ARO) by the single loss expectancy (SLE). While SLE represents the expected monetary loss every time a loss or risk occurs, and ARO is the probability that a loss or risk will occur in the year under consideration.