What will be the annualized loss expectancy in her project?

Della work as a project manager for BlueWell Inc. A threat with a dollar value of $250,000 is
expected to happen in her project and the frequency of threat occurrence per year is 0.01. What
will be the annualized loss expectancy in her project?

A.
$2,000

B.
$2,500

C.
$3,510

D.
$3,500

Explanation:
The annualized loss expectancy in her project will be $2,500. 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:
ALE = SLE * ARO
= 250,000 * 0.01
= 2,500