CRISC Risk Response and Reporting Practice Question
An organization is selecting a control to reduce the risk of unauthorized data exfiltration. The annual loss expectancy (ALE) for this risk is currently $500,000. The proposed control costs $80,000 annually and is expected to reduce the ALE by 60%. What is the net benefit (reduction in risk exposure minus control cost) of implementing this control?
⚠ Common exam trap
The trap here is that candidates often forget to subtract the control cost from the risk reduction, mistakenly selecting the reduction amount ($300,000) as the net benefit, or they incorrectly apply the percentage to the wrong base value, such as subtracting the cost from the original 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
✓
$220,000
The current ALE is $500,000. A 60% reduction lowers the ALE by $300,000 (0.60 × $500,000). The net benefit is the reduction in risk exposure ($300,000) minus the annual control cost ($80,000), resulting in $220,000. This calculation directly measures the residual risk reduction against the cost of the control, a key concept in cost-benefit analysis for risk response.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
$220,000
Why this is correct
Correct: $300,000 reduction minus $80,000 cost = $220,000.
- ✗
$420,000
Why it's wrong here
This is incorrect; it adds the ALE and reduction incorrectly.
- ✗
$300,000
Why it's wrong here
This is the reduction in ALE, not net benefit.
- ✗
$120,000
Why it's wrong here
This is incorrect as it subtracts the reduction from the cost incorrectly.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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.