You are performing a quantitative threat assessment on a high-value asset. You have a Threat Probability (P) of 0.2 and an Asset Impact (I) of $500,000. During the analysis, you find a new mitigation that reduces the probability by 50%. What is the new Annualized Loss Expectancy (ALE)?
Trap 1: $75,000
Incorrect math.
Trap 2: $100,000
This is the original ALE.
Trap 3: $25,000
Incorrect calculation of probability reduction.
- A
$75,000
Why it fails: Incorrect math.
- B
$100,000
Why it fails: This is the original ALE.
- C
$25,000
Why it fails: Incorrect calculation of probability reduction.
- D
$50,000
Multiplying the reduced probability (0.2 × 0.5 = 0.1) by the $500,000 asset impact yields $50,000, satisfying the stem's 50% mitigation constraint. ALE expresses expected annual loss as probability times impact, so halving P halves the original $100,000 figure.