CRISC Information Technology and Security Practice Question
A risk manager is using the FAIR model to quantify cyber risk. Which of the following inputs is MOST directly used to calculate probable financial loss?
⚠ Common exam trap
CRISC often tests whether candidates confuse FAIR's inputs with traditional ALE formula components—candidates pick ALE thinking it is a foundational input, when FAIR actually generates loss distributions that feed into ALE, not the reverse.
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
✓
Loss event frequency and loss magnitude
The FAIR (Factor Analysis of Information Risk) model calculates probable financial loss by combining Loss Event Frequency (LEF)—how often a threat event occurs—with Loss Magnitude (LM)—how much each event costs. These two factors are the core inputs to FAIR's risk quantification, producing a loss distribution rather than a single point estimate. This makes option B the most direct input pair.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Annualized loss expectancy (ALE)
Why it's wrong here
ALE is an output of quantitative risk analysis, not an input to FAIR's probable financial loss calculation, which derives from loss magnitude and loss event frequency. It is tempting because ALE is the classic annualised figure many methodologies report, and would be the right answer if the question asked for the final expected yearly loss value.
- ✓
Loss event frequency and loss magnitude
Why this is correct
FAIR decomposes probable loss into two independent factors: loss event frequency (how often a threat event occurs) and loss magnitude (the financial impact per event). Multiplying these produces the probable financial loss figure, so both inputs are required directly.
- ✗
Vulnerability severity scores (CVSS)
Why it's wrong here
CVSS scores express technical severity, not monetary loss magnitude, so they cannot feed FAIR's probable financial loss calculation, which needs asset value and loss magnitude estimates. It is tempting because CVSS is widely used to prioritise vulnerabilities, and would be correct if the question asked how to rank remediation effort rather than quantify financial exposure.
- ✗
Number of security incidents per year
Why it's wrong here
Incident count alone does not determine financial impact.
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JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official ISACA exam blueprint
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.