CAS-004 Governance, Risk, and Compliance Practice Question
A security analyst is calculating the annualized loss expectancy (ALE) for a server that has an asset value of $50,000 and an exposure factor (EF) of 0.2. The annualized rate of occurrence (ARO) is estimated at 4. What is the ALE?
⚠ Common exam trap
CAS-005 often tests the confusion between SLE and ALE; candidates stop at AV × EF and forget to multiply by ARO, or they skip the EF and multiply AV × ARO instead.
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
$40,000
The ALE is calculated as SLE × ARO, where SLE (Single Loss Expectancy) = Asset Value × Exposure Factor. Here, SLE = $50,000 × 0.2 = $10,000, and ARO = 4, so ALE = $10,000 × 4 = $40,000. This represents the expected annual monetary loss from the risk.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
$10,000
Why it's wrong here
$10,000 is the single loss expectancy (AV × EF), not the ALE. The ARO of 4 must then multiply it, giving $40,000. Stopping at SLE is tempting because it is the intermediate step, but the question asks for the annualised figure.
- ✓
$40,000
Why this is correct
Multiplying asset value by exposure factor gives the single-loss expectancy: $50,000 × 0.2 = $10,000. Annualising by the ARO of 4 yields $40,000, satisfying the stem's requirement to compute ALE from AV, EF and ARO. The $40,000 figure therefore matches the correct calculation.
- ✗
$50,000
Why it's wrong here
$50,000 is the asset value (AV) alone, not the ALE. The calculation requires SLE = AV × EF = $10,000, then ALE = SLE × ARO = $40,000. Quoting AV is tempting because it is the largest given figure, but AV never appears directly in the ALE formula.
- ✗
$200,000
Why it's wrong here
ALE is single loss expectancy multiplied by annualised rate of occurrence: $50,000 x 0.2 = $10,000 SLE, then $10,000 x 4 = $40,000. The $200,000 figure multiplies asset value by ARO, omitting the exposure factor, which overstates expected annual loss fourfold.
Go deeper
Related to this question
About these practice questions
This CAS-005 question is part of Courseiva's 973-question bank — original exam-style content with full explanations and wrong-answer analysis, never real exam questions or exam dumps. Learn why practice questions differ from exam dumps →
JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official CompTIA exam blueprint
This CAS-005 practice question is part of Courseiva's free CompTIA certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CAS-005 exam.