CRISC IT Risk Assessment Practice Question
An organization is evaluating the risk of a data breach using the FAIR framework. The threat event frequency is estimated at 10 per year, the vulnerability is 0.2, and the loss magnitude is $500,000 per event. What is the annualized loss expectancy (ALE)?
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
✓
$1,000,000
ALE = ARO × SLE. In FAIR, LEF = TEF × Vulnerability = 10 × 0.2 = 2 events per year. SLE is the loss magnitude per event, $500,000. ALE = 2 × $500,000 = $1,000,000.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
$500,000
Why it's wrong here
This is the SLE, not the ALE.
- ✓
$1,000,000
Why this is correct
Correct calculation: ALE = (10 × 0.2) × $500,000 = $1,000,000.
- ✗
$5,000,000
Why it's wrong here
This would be ALE if vulnerability were 1.0 (10 × $500,000).
- ✗
$100,000
Why it's wrong here
This would result from using TEF directly (10 × $500,000 = $5 million, then incorrectly dividing).
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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