Which of the following is the proper way to quantify the total monetary damage resulting from an exploited vulnerability?

ALE (Annualized Loss Expectancy) is calculated as ALE = SLE × ARO, where SLE (Single Loss Expectancy) represents the monetary loss per incident and ARO (Annualized Rate of Occurrence) represents how often the event occurs per year. This formula directly quantifies the total expected monetary damage from a vulnerability over time, making it the standard risk quantification metric in security risk assessments.

ARO (Annualized Rate of Occurrence) only measures how frequently a threat event is expected to occur per year, not the total monetary damage - it is an input to the ALE calculation, not the final damage figure.

MTBF (Mean Time Between Failures) is a reliability metric measuring the average operational time between system failures, and does not quantify financial loss from a security vulnerability.

TCO (Total Cost of Ownership) measures the full lifecycle cost of owning and operating an asset or system, not the monetary damage resulting from an exploited vulnerability.