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IT Risk AssessmentmediumMultiple ChoiceObjective-mapped

CRISC IT Risk Assessment Practice Question

A quantitative risk analysis for a data breach yields an Annualized Loss Expectancy (ALE) of $500,000. The Single Loss Expectancy (SLE) is $100,000. What is the Annualized Rate of Occurrence (ARO)?

⚠ Common exam trap

Many candidates confuse the formula and incorrectly divide SLE by ALE (yielding 0.2) instead of dividing ALE by SLE, or they misplace decimal points when calculating the rate.

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

5

The Annualized Loss Expectancy (ALE) is calculated as Single Loss Expectancy (SLE) multiplied by the Annualized Rate of Occurrence (ARO). Given ALE = $500,000 and SLE = $100,000, the ARO is $500,000 / $100,000 = 5. This means the data breach is expected to occur 5 times per year.

Answer analysis

Option-by-option breakdown

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

  • 5

    Why this is correct

    Correct. ARO = ALE / SLE = 5.

  • 50

    Why it's wrong here

    Incorrect calculation; ARO = 500,000/100,000 = 5.

  • 0.2

    Why it's wrong here

    That would be SLE / ALE, not ALE / SLE.

  • 500,000

    Why it's wrong here

    That is the ALE value, not ARO.

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JA

Written by Johnson Ajibi, MSc IT Security

Senior Network & Security Engineer · founder of Courseiva

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