CRISC Risk Response and Reporting Practice Question
An organization is evaluating a new security control that costs $50,000 annually to implement and maintain. The current annualized loss expectancy (ALE) for a related risk is $200,000. The control is expected to reduce the ALE by 85%. Using cost-benefit analysis, what is the net benefit of implementing this control?
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
✓
$120,000
The reduction in ALE is 85% of $200,000 = $170,000. The annual control cost is $50,000. Net benefit = $170,000 - $50,000 = $120,000.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
$120,000
Why this is correct
The control reduces the $200,000 ALE by 85%, giving a mitigated ALE of $30,000 and an $170,000 loss reduction. Subtracting the $50,000 annual cost yields a net benefit of $120,000, satisfying the cost-benefit comparison the stem requires.
- ✗
$30,000
Why it's wrong here
$30,000 equals the residual ALE after the control ($200,000 × 15%), not the net benefit. Subtracting only part of the cost or misreading the residual as savings produces this figure; it would be correct if the question asked for remaining risk exposure rather than net benefit.
- ✗
$170,000
Why it's wrong here
$170,000 is the risk reduction ($200,000 × 85%) before subtracting the $50,000 control cost. It is tempting because it captures the mitigated loss, and it would be correct if the question asked for the control's gross benefit rather than its net benefit.
- ✗
$150,000
Why it's wrong here
$150,000 is the risk reduction ($200,000 × 75%), applying the wrong mitigation percentage. It is tempting because it resembles a benefit figure, and it would be correct if the control reduced the ALE by 75% rather than 85%.
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JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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