You work as a project manager for SoftTech Inc. A threat with a dollar value of $150,000 is expected
to happen in your project and the frequency of threat occurrence per year is 0.001. What will be the
annualized loss expectancy in your project?
A.
$180.25
B.
$150
C.
$100
D.
$120
Explanation:
The annualized loss expectancy in your project will be $150.
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
= 150,000 * 0.001
= 150
Answer options C, D, and A are incorrect. These are not valid answers.