- A
$220,000
Correct: $300,000 reduction minus $80,000 cost = $220,000.
- B
$420,000
Why wrong: This is incorrect; it adds the ALE and reduction incorrectly.
- C
$300,000
Why wrong: This is the reduction in ALE, not net benefit.
- D
$120,000
Why wrong: This is incorrect as it subtracts the reduction from the cost incorrectly.
Question 513 of 1,000
CRISC Risk Response and Reporting Practice Question
This CRISC practice question tests your understanding of risk response and reporting. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
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?
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.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
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.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
$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.
Common exam traps
Common exam trap: answer the scenario, not the keyword
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.
Detailed technical explanation
How to think about this question
The ALE formula is ALE = SLE × ARO, where SLE is single loss expectancy and ARO is annualized rate of occurrence. In this scenario, the control reduces the ALE by 60%, meaning the residual ALE is $200,000. The net benefit calculation ($300,000 - $80,000 = $220,000) is a form of cost-benefit analysis (CBA) used in risk response to justify control selection; it ensures the control's value exceeds its cost, a principle aligned with ISO 31000 and FAIR risk analysis frameworks.
KKey Concepts to Remember
- Read the scenario before looking for a memorised answer.
- Find the constraint that changes the correct option.
- Eliminate answers that are true in general but not in this case.
TExam Day Tips
- Watch for words such as best, first, most likely and least administrative effort.
- Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A practitioner preparing for the CRISC exam encounters this exact type of scenario on the job. The correct answer here is not the most general option — it is the best answer for the specific constraint described. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Real exam questions reward reading the full scenario before eliminating options, because the constraint defines which answer fits.
What to study next
Got this wrong? Here's your next step.
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FAQ
Questions learners often ask
What does this CRISC question test?
Risk Response and Reporting — This question tests Risk Response and Reporting — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: $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.
What should I do if I get this CRISC question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Last reviewed: Jul 4, 2026
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.
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