CRISC: Certified in Risk and Information Systems ControlDemo

By Isaca · Question Mode

QuestionQ1627

Risk Assessment

As the project manager for the NHQ project at Bluewell Inc., you are working with an asset valued at $200,000 that has an exposure factor of 45 percent.

Given that the loss in this project occurs once a month (annual rate of occurrence), what is the Annual Loss Expectancy (ALE) for the project?

  • A $ 2,160,000
  • B $ 95,000
  • C $ 108,000
  • D $ 90,000
Explanation

Annual Loss Expectancy is computed as Single Loss Expectancy multiplied by the Annualized Rate of Occurrence (ALE = SLE x ARO), where SLE itself equals Asset Value multiplied by Exposure Factor. Here SLE = $200,000 x 0.45 = $90,000, and applying the annualized rate of occurrence of one instance for the year yields ALE = $90,000 x 1 = $90,000, consistent with the standard risk-quantification formula used throughout ISACA's CRISC body of knowledge for expressing expected yearly loss from a given asset/threat pairing.

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