CRISC IT Risk Assessment Practice Question
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)?
⚠ Common exam trap
ISACA CRISC 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.
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.
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.
- ✗
$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.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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.