CISSP · Question #1419
CISSP Question #1419: Real Exam Question with Answer & Explanation
The correct answer is B: 3,500. The reasonable annual loss expectation for the company is 3,500, which is calculated by dividing the total loss over 15 years by 15. The total loss over 15 years is 52,500, which is the sum of the costs associated with each failure, as shown in the image. The annual loss expectat
Question
In the last 15 years a company has experienced three electrical failures. The cost associated with each failure is listed below. Which of the following would be a reasonable annual loss expectation?
Options
- A140,000
- B3,500
- C350,000
- D14,000
Explanation
The reasonable annual loss expectation for the company is 3,500, which is calculated by dividing the total loss over 15 years by 15. The total loss over 15 years is 52,500, which is the sum of the costs associated with each failure, as shown in the image. The annual loss expectation is an estimate of the potential loss that the company may incur due to a specific threat or risk in a given year. It is calculated by multiplying the annualized rate of occurrence (ARO) of the threat or risk by the single loss expectancy (SLE) of the asset. The ARO is the frequency or probability of the threat or risk occurring in a year, and the SLE is the cost or impact of the threat or risk on the asset. In this case, the ARO is 0.2, which is the average number of electrical failures per year (3/15), and the SLE is 17,500, which is the average cost of each failure (52,500/3). Therefore, the annual loss expectation is 0.2 x 17,500 = 3,50034.
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