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?
A.
$ 125,025
B.
$ 31,250
C.
$ 5,000
D.
$ 3,125,000
Explanation:
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
These are not SLEs of this project.