Governance & ComplianceQuestion 94 of 100
A calculation of expected yearly loss from a risk, found by multiplying single loss expectancy by annual rate of occurrence, is the:
a.Residual risk
b.Risk appetite
c.Exposure factor
d.Annualized loss expectancy
Explanation
Annualized loss expectancy (ALE) estimates the expected yearly cost of a risk by multiplying single loss expectancy (SLE) by the annualized rate of occurrence (ARO). It supports cost-benefit decisions about controls. Spending more than the ALE on mitigation is usually not justified.
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