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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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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