CRISC Risk Response and Reporting Practice Question
A risk practitioner is performing a cost-benefit analysis for a proposed control. The annualized loss expectancy (ALE) for a risk is currently $500,000. The proposed control will reduce the ALE by 80%, and the annual cost of the control is $150,000. What is the net benefit of implementing the control?
⚠ Common exam trap
The trap is forgetting to subtract the control's annual cost from the risk reduction benefit, or incorrectly subtracting the cost from the residual ALE instead of the benefit.
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
✓
$250,000
The control reduces the ALE by 80%, so the risk reduction benefit is 0.80 × $500,000 = $400,000. The net benefit is the benefit minus the control cost: $400,000 − $150,000 = $250,000. This represents the expected annual savings after implementing the control.
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
$100,000 is the control's annual cost minus nothing meaningful; the risk reduction is $400,000 (80% of $500,000), so net benefit is $400,000 − $150,000 = $250,000. It is tempting because $100,000 appears if you subtract the cost from the wrong base figure.
- ✓
$250,000
Why this is correct
Reducing the $500,000 ALE by 80% yields an annualized loss expectancy of $100,000, a $400,000 risk reduction. Subtracting the control's $150,000 annual cost gives a net benefit of $250,000, satisfying the stem's cost-benefit requirement. This figure represents the residual value after control costs.
- ✗
$400,000
Why it's wrong here
$400,000 is only the risk reduction (80% of $500,000), not the net benefit; the $150,000 annual control cost must be subtracted, giving $250,000. It is tempting because the mitigation value is the headline figure, but net benefit requires deducting control cost.
- ✗
$350,000
Why it's wrong here
$350,000 subtracts only $150,000 from $500,000, ignoring that the control reduces loss by 80% rather than eliminating it entirely. It is tempting because it uses both given numbers, but the correct net benefit is $400,000 − $150,000 = $250,000.
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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.