Joe, the system administrator, has been asked to calculate the Annual Loss Expectancy (ALE) for a $5,000 server, which often crashes. In the past year, the server has crashed 10 times, requiring a sys

The correct answer is B. $5,000. ALE is calculated using the formula: ALE = SLE × ARO. The Single Loss Expectancy (SLE) = Asset Value × Exposure Factor = $5,000 × 10% (0.10) = $500. The Annual Rate of Occurrence (ARO) = 10 crashes per year. Therefore, ALE = $500 × 10 = $5,000. The asset value is $5,000 but only

Security program management and oversight

Question

Joe, the system administrator, has been asked to calculate the Annual Loss Expectancy (ALE) for a $5,000 server, which often crashes. In the past year, the server has crashed 10 times, requiring a system reboot to recover with only 10% loss of data or function. Which of the following is the ALE of this server?

Options

A$500
B$5,000
C$25,000
D$50,000

How the community answered

(32 responses)

A
3% (1)
B
75% (24)
C
13% (4)
D
9% (3)

Explanation

ALE is calculated using the formula: ALE = SLE × ARO. The Single Loss Expectancy (SLE) = Asset Value × Exposure Factor = $5,000 × 10% (0.10) = $500. The Annual Rate of Occurrence (ARO) = 10 crashes per year. Therefore, ALE = $500 × 10 = $5,000. The asset value is $5,000 but only 10% is lost per incident (SLE = $500), and that loss occurs 10 times per year, yielding a $5,000 annual expected loss. This is a classic risk quantification calculation on security certification exams.

Topics

#ALE#risk calculation#SLE#ARO

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