CRISC IT Risk Assessment Practice Question
In a quantitative risk analysis using FAIR, which of the following best represents Loss Magnitude (LM)?
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
✓
Primary Loss + Secondary Loss
In FAIR, Loss Magnitude (LM) is the sum of Primary Loss (direct costs) and Secondary Loss (indirect costs) resulting from a loss event.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Primary Loss + Secondary Loss
Why this is correct
FAIR defines Loss Magnitude as the total impact of a risk event, comprising primary loss (direct costs such as response and replacement) plus secondary loss (consequential costs such as fines, reputation damage and legal fees). Summing both satisfies the stem's requirement for the complete quantitative loss figure.
- ✗
Single Loss Expectancy (SLE)
Why it's wrong here
In FAIR, Loss Magnitude (LM) is the probable cost of a single loss event, derived from primary and secondary loss factors, not a pre-calculated annualised figure. SLE is tempting because it also expresses a single-event monetary loss, but SLE is a component of Annualised Loss Expectancy (ALE) and assumes a fixed asset value and exposure factor, whereas LM in FAIR explicitly models uncertainty through loss event frequency and probable loss distributions. SLE would be correct in a classic quantitative risk analysis using ALE, but not in FAIR’s scenario-based, probabilistic framework.
- ✗
Threat Event Frequency × Vulnerability
Why it's wrong here
Threat Event Frequency multiplied by Vulnerability gives Loss Event Frequency, not Loss Magnitude; LM quantifies the financial impact per loss event. This formula is what you would use to derive how often losses occur, a separate FAIR factor.
- ✗
Annualized Loss Expectancy (ALE)
Why it's wrong here
ALE is the product of single loss expectancy and annualised rate of occurrence, so it aggregates frequency and loss into one yearly figure; FAIR's Loss Magnitude is the per-event impact only, split into primary and secondary forms. ALE tempts because it quantifies annual risk exposure, which suits budgeting rather than representing a single event's magnitude.
Go deeper
Related to this question
About these practice questions
Courseiva writes every CRISC question from scratch — 1,062 in total, each with an explanation and a wrong-answer breakdown. None are copied from real exams or dumps. Learn why practice questions differ from exam dumps →
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.