Calculations Flashcards
Formula for SLE
Asset Value x Exposure Factor
SLE-AV x EF
Formula for ALE
ALE = SLE X ARO
One of the primary steps in a quantitative risk analysis
is to determine the annualized loss expectancy (ALE). How is the ALE calculated?
Single loss expectancy / Frequency per year
Asset value x 2.8
Single loss expectancy X Frequency per year
Asset value + (Single loss expectancy / Frequency per year)
Single loss expectancy X Frequency per year
A quantitative risk analysis calculates the ALE, which is the annual loss of an asset if expected threats are realized. This value allows the company to evaluate the financial implications of potential threats. ALE is calculated as the product of Single Life Expectancy (SLE) and the Frequency per year, also known as Annual Rate of Occurrence (ARO).
Steve is doing risk analysis as part of his company’s Information Risk Management. He ends up with a calculation that the annualized loss expectancy (ALE) due to a virus attack on the company’s network is $ 25000. He also calculates that the single loss expectancy (SLE) due to this event would be $ 25000. What can you say about the annualized rate of occurrence (ARO)?
The ARO will be greater than 1.0
The ARO will be less than 1.0
The ARO cannot be calculated in this case.
The ARO equals 1.0
The ARO equals 1.0
The annualized loss expectancy is obtained by the product of the single loss expectancy and the annualized rate of occurrence. In this instance, the ALE equals the SLE, hence the ARO equals 1.0
What formula is used to calculate total risk?
Single loss expectancy x frequency per year
Threats x vulnerability x asset value
TxVxA Threats x vulnerability x asset value
To determine total risk, one must first identify and quantify threats and vulnerabilities, as well as the value of assets, and then apply the following formula: threats x vulnerability x asset value.
