CRISC IT Risk Assessment Practice Question
In a quantitative risk analysis, the annualized loss expectancy (ALE) is calculated as $1 million. If the organization implements a control that reduces the ARO from 0.5 to 0.1, and the SLE remains constant at $2 million, what is the new ALE?
⚠ Common exam trap
The trap here is that candidates may mistakenly apply the reduction to the ALE itself (e.g., subtracting 0.4 of $1 million) instead of recalculating ALE with the new ARO, or they may confuse ARO with a percentage and incorrectly compute $2 million × 0.1 = $200,000 as 'too small' and pick a larger wrong value.
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
✓
$200,000
The annualized loss expectancy (ALE) is calculated as SLE × ARO. With SLE constant at $2 million and the new ARO reduced to 0.1, the new ALE is $2,000,000 × 0.1 = $200,000. This reflects the residual risk after the control is implemented.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
$200,000
Why this is correct
Correct: $2M × 0.1 = $200,000.
- ✗
$500,000
Why it's wrong here
This would be if ARO were 0.25, not 0.1.
- ✗
$100,000
Why it's wrong here
This would be if SLE were $1M, not $2M.
- ✗
$1 million
Why it's wrong here
This is the original ALE.
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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.