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CRISC IT Risk Assessment Practice Question

This CRISC practice question tests your understanding of it risk assessment. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.

A company is evaluating the risk of a data breach using the FAIR framework. The threat event frequency is estimated at 10 per year, and the vulnerability is 0.2. The primary loss per event is $50,000 and secondary loss is $20,000. What is the annualized loss expectancy (ALE)?

Clue words in this question

Noticing these words before you look at the options changes how you read each choice.

  • Clue: "primary"

    Why it matters: Asks for the main purpose or function, not a secondary benefit. Eliminate answers that describe side-effects or partial functions.

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

✓

$140,000

The annualized loss expectancy (ALE) is calculated as threat event frequency (TEF) × vulnerability (V) × loss per event. Here, TEF = 10, V = 0.2, primary loss = $50,000, secondary loss = $20,000, so total loss per event = $70,000. ALE = 10 × 0.2 × $70,000 = 10 × $14,000 = $140,000, making option B correct.

Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.

Answer analysis

Option-by-option breakdown

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

  • ✗

    $100,000

    Why it's wrong here

    Incorrect calculation.

  • ✓

    $140,000

    Why this is correct

    Correctly computed as described.

    Clue confirmation

    The clue word "primary" in the question point toward this answer.

    Related concept

    Read the scenario before looking for a memorised answer.

  • ✗

    $70,000

    Why it's wrong here

    This is the single loss expectancy, not annualized.

  • ✗

    $1,400,000

    Why it's wrong here

    Misplaced decimal.

Common exam traps

Common exam trap: answer the scenario, not the keyword

Cisco often tests the candidate's ability to correctly apply the FAIR formula by including both primary and secondary losses, and the trap here is that candidates forget to multiply by vulnerability or omit secondary loss, leading to options A or C.

Detailed technical explanation

How to think about this question

In the FAIR framework, ALE = TEF × Vulnerability × Loss Magnitude, where Loss Magnitude includes both primary and secondary losses. Vulnerability represents the probability that a threat event will result in a loss, often derived from control effectiveness. A real-world scenario: if a firewall has a 20% chance of being bypassed (vulnerability 0.2) and an attacker attempts 10 times per year, the expected annual losses from data breach response and regulatory fines must both be factored in.

KKey Concepts to Remember

  • Read the scenario before looking for a memorised answer.
  • Find the constraint that changes the correct option.
  • Eliminate answers that are true in general but not in this case.

TExam Day Tips

  • Watch for words such as best, first, most likely and least administrative effort.
  • Review why wrong options are wrong, not only why the correct option is correct.

Key takeaway

Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.

Real-world example

How this comes up in practice

A practitioner preparing for the CRISC exam encounters this exact type of scenario on the job. The correct answer here is not the most general option — it is the best answer for the specific constraint described. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Real exam questions reward reading the full scenario before eliminating options, because the constraint defines which answer fits.

What to study next

Got this wrong? Here's your next step.

Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.

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FAQ

Questions learners often ask

What does this CRISC question test?

IT Risk Assessment — This question tests IT Risk Assessment — Read the scenario before looking for a memorised answer..

What is the correct answer to this question?

The correct answer is: $140,000 — The annualized loss expectancy (ALE) is calculated as threat event frequency (TEF) × vulnerability (V) × loss per event. Here, TEF = 10, V = 0.2, primary loss = $50,000, secondary loss = $20,000, so total loss per event = $70,000. ALE = 10 × 0.2 × $70,000 = 10 × $14,000 = $140,000, making option B correct.

What should I do if I get this CRISC question wrong?

Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.

Are there clue words in this question I should notice?

Yes — watch for: "primary". Asks for the main purpose or function, not a secondary benefit. Eliminate answers that describe side-effects or partial functions.

What is the key concept behind this question?

Read the scenario before looking for a memorised answer.

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Last reviewed: Jul 4, 2026

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This CRISC practice question is part of Courseiva's free ISACA 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 CRISC exam.