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
A 60% reduction on the $500,000 ALE yields $300,000 in avoided loss. Subtracting the $80,000 annual control cost gives a net benefit of $220,000, satisfying the stem's requirement to quantify risk reduction minus control cost.
- ✗
$420,000
Why it's wrong here
This subtracts the $80,000 control cost from the original $500,000 ALE, which is not the calculation required. Net benefit is the reduction in risk exposure ($500,000 × 60% = $300,000) minus the control cost ($80,000), giving $220,000.
- ✗
$300,000
Why it's wrong here
This figure treats the full 60% ALE reduction ($300,000) as the net benefit, omitting the $80,000 annual control cost. Net benefit is risk reduction minus control cost: $300,000 − $80,000 = $220,000. $300,000 is the gross risk reduction, not the net figure the question asks for.
- ✗
$120,000
Why it's wrong here
This figure appears to derive from subtracting the $80,000 control cost from something other than the risk reduction, or from misapplying the 60% factor. Net benefit is $300,000 risk reduction minus $80,000 control cost, which equals $220,000, not $120,000.
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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.