- A
$100,000
Why wrong: This is the control cost, not the net benefit.
- B
$300,000
Reduction of $400,000 minus cost of $100,000 equals $300,000 net benefit.
- C
$400,000
Why wrong: This is the reduction, not the net benefit after subtracting control cost.
- D
$500,000
Why wrong: This is the original ALE, not the net benefit.
Question 45 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.
During a cost-benefit analysis for a proposed control, the annual loss expectancy (ALE) for a risk is currently $500,000. The control will cost $100,000 annually and is expected to reduce the ALE by 80%. What is the net benefit 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
✓
$300,000
The current annual loss expectancy (ALE) is $500,000. An 80% reduction lowers the ALE by $400,000, resulting in a new ALE of $100,000. The annual control cost is $100,000, so the net benefit is the reduction in ALE ($400,000) minus the control cost ($100,000), which equals $300,000.
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.
- ✗
$100,000
Why it's wrong here
This is the control cost, not the net benefit.
- ✓
$300,000
Why this is correct
Reduction of $400,000 minus cost of $100,000 equals $300,000 net benefit.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
$400,000
Why it's wrong here
This is the reduction, not the net benefit after subtracting control cost.
- ✗
$500,000
Why it's wrong here
This is the original ALE, not the net benefit.
Common exam traps
Common exam trap: answer the scenario, not the keyword
Cisco often tests the distinction between gross reduction in ALE and net benefit, tricking candidates into forgetting to subtract the annual control cost from the ALE reduction.
Detailed technical explanation
How to think about this question
In risk management, net benefit is calculated as (current ALE - new ALE) - annual control cost, where new ALE = current ALE × (1 - reduction percentage). Here, new ALE = $500,000 × 0.2 = $100,000, so the reduction is $400,000, and net benefit = $400,000 - $100,000 = $300,000. This aligns with the FAIR (Factor Analysis of Information Risk) model, where cost-benefit analysis must compare the residual risk value against the control's total cost of ownership.
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: $300,000 — The current annual loss expectancy (ALE) is $500,000. An 80% reduction lowers the ALE by $400,000, resulting in a new ALE of $100,000. The annual control cost is $100,000, so the net benefit is the reduction in ALE ($400,000) minus the control cost ($100,000), which equals $300,000.
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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