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?
- $360,000
- $180,000
- $280,000
- $540,000
Answer(s): A
Explanation:
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
Answers C, B, and D are incorrect. These are not valid answers.
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