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NEW QUESTION: 1
What is the highest amount a company should spend annually on countermeasures for protecting an asset valued at $1,000,000 from a threat that has an annualized rate of occurrence (ARO) of once every five years and an exposure factor (EF) of 30%?
The cost of a countermeasure should not be greater in cost than the risk it mitigates (ALE). For a quantitative risk assessment, the equation is ALE = ARO x SLE where the SLE is calculated as the product of asset value x exposure factor. An event that happen once every five years would have an ARO of .2 (1 divided by 5).
SLE = Asset Value (AV) x Exposure Fact (EF)
SLE = 1,000,000 x .30 = 300,000
ALE = SLE x Annualized Rate of Occurance (ARO)
ALE = 300,000 x .2 = 60,000
Know your acronyms:
ALE -- Annual loss expectancy
ARO -- Annual rate of occurrence
SLE -- Single loss expectancy
The following are incorrect answers:
$300,000 is incorrect. See the explanation of the correct answer for the correct calculation.
$150,000 is incorrect. See the explanation of the correct answer for the correct calculation.
$1,500 is incorrect. See the explanation of the correct answer for the correct calculation.
Reference(s) used for this question:
Mc Graw Hill, Shon Harris, CISSP All In One (AIO) book, Sixth Edition , Pages 87-88 and
Official ISC2 Guide to the CISSP Exam, (OIG), Pages 60-61
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