A risk analyst is performing a quantitative risk analysis for a company's customer database. Historical data shows a major data breach occurs, on average, twice per year. The Single Loss Expectancy (SLE) for such a breach is calculated to be $50,000. Based on this information, what is the Annualized Loss Expectancy (ALE)?
The Annualized Loss Expectancy (ALE) is calculated by multiplying the Single Loss Expectancy (SLE) by the Annualized Rate of Occurrence (ARO). In this scenario, the SLE is given as $50,000, and the ARO is 2, as the breach occurs twice per year. Therefore, the ALE is $50,000 * 2 = $100,000. The other values represent incorrect calculations or confuse the SLE with the ALE.
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What is Annualized Loss Expectancy (ALE)?
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What is the Annualized Rate of Occurrence (ARO) and how is it determined?
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What is the difference between ALE and Single Loss Expectancy (SLE)?