hardMultiple ChoiceObjective-mapped
CRISC Uses a quantitative risk analysis method Practice Question
An organization uses a quantitative risk analysis method. The annualized loss expectancy (ALE) for a specific risk is calculated as $500,000. The cost of implementing a control is $150,000 per year, and it is expected to reduce the ALE by 80%. What is the net benefit of implementing the control?
⚠ Common exam trap
It's easy for candidates to confuse the gross reduction in ALE ($400,000) with the net benefit, forgetting to subtract the annual control cost, leading them to select Option B.
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
✓
$250,000
The current ALE is $500,000. An 80% reduction means the ALE decreases by $400,000, resulting in a new ALE of $100,000. The annual control cost is $150,000. The net benefit is the reduction in ALE ($400,000) minus the control cost ($150,000), which equals $250,000. Option C is correct because it correctly calculates the net benefit as the risk reduction minus the control cost.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
$50,000
Why it's wrong here
Incorrectly subtracts reduction from control cost.
- ✗
$400,000
Why it's wrong here
This is the reduction in ALE, not net benefit.
- ✓
$250,000
Why this is correct
Correct calculation of net benefit.
- ✗
$350,000
Why it's wrong here
Incorrectly calculates reduction as $500,000 - $150,000.
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JA
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.