SSCP Question #393: Real Exam Question with Answer & Explanation

The correct answer is A: single loss expectancy x annualized rate of occurrence.. ALE (Annual Loss Expectancy) is calculated as: ALE = SLE × ARO, where SLE (Single Loss Expectancy) is the monetary loss from a single occurrence of a risk event, and ARO (Annualized Rate of Occurrence) is the estimated frequency of that event per year. This formula is foundationa

Submitted by asante_acc· Apr 18, 2026Risk Identification, Monitoring and Analysis

Question

Which one of the following represents an ALE calculation?

Options

Asingle loss expectancy x annualized rate of occurrence.
Bgross loss expectancy x loss frequency.
Cactual replacement cost - proceeds of salvage.
Dasset value x loss expectancy.

Explanation

ALE (Annual Loss Expectancy) is calculated as: ALE = SLE × ARO, where SLE (Single Loss Expectancy) is the monetary loss from a single occurrence of a risk event, and ARO (Annualized Rate of Occurrence) is the estimated frequency of that event per year. This formula is foundational to quantitative risk analysis, enabling organizations to prioritize security investments based on expected annual financial exposure.

Topics

#Risk Management#Quantitative Risk Analysis#Annualized Loss Expectancy#Risk Calculation

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