Courseiva

CAS-004 Governance, Risk, and Compliance Practice Question

A security analyst is calculating the annualized loss expectancy (ALE) for a server. The single loss expectancy (SLE) is $5,000 and the annualized rate of occurrence (ARO) is 0.2. What is the ALE?

⚠ Common exam trap

CAS-005 often tests whether candidates confuse the ALE formula (SLE × ARO) with related formulas like SLE (AV × EF) or with additive/multiplicative errors, catching those who add SLE and ARO or invert the division.

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

✓

$1,000

The Annualized Loss Expectancy (ALE) is calculated as SLE × ARO. With an SLE of $5,000 and an ARO of 0.2, the ALE is $5,000 × 0.2 = $1,000. This represents the expected yearly financial loss from the risk event, factoring in how often it is expected to occur.

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

  • ✗

    $0

    Why it's wrong here

    ALE is SLE multiplied by ARO, so $5,000 × 0.2 = $1,000, not $0. Zero would only apply if the asset had no value or the threat never occurred, which contradicts the given ARO of 0.2. This figure likely comes from misreading the decimal as zero occurrences.

  • ✗

    $5,200

    Why it's wrong here

    $5,200 adds SLE to ARO rather than multiplying them; ALE requires SLE × ARO, giving $1,000. Summing is tempting when treating ARO as a dollar figure, but ARO is a frequency, so addition has no meaning here.

  • ✓

    $1,000

    Why this is correct

    Multiplying SLE by ARO gives $5,000 × 0.2 = $1,000, the annualised loss expectancy. This satisfies the stem's requirement to quantify expected yearly loss from the server risk, expressing exposure as a single monetary figure rather than a frequency or per-incident cost.

  • ✗

    $25,000

    Why it's wrong here

    ALE is SLE × ARO, giving $1,000, not $25,000. That figure results from dividing SLE by ARO ($5,000 ÷ 0.2), inverting the formula. Division would apply when deriving SLE from a known ALE and ARO, not when calculating ALE itself.

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 →

How Courseiva writes practice questions · Editorial policy

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.