ISC Leadership And Organizational Management Practice Question
The board of directors requests a quantitative risk assessment for a new cloud-based initiative. Which metric provides the best representation of potential financial exposure to the organization for a single, significant security event?
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
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Single Loss Expectancy (SLE)
Single Loss Expectancy (SLE) is the monetary loss expected from a single security incident, making it the most direct metric for board-level financial exposure discussions.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
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Single Loss Expectancy (SLE)
Why this is correct
SLE is the direct product of the asset value and the exposure factor.
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Residual Risk
Why it's wrong here
Residual risk is a qualitative or quantitative assessment of risk remaining after controls, not a single event exposure metric.
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Annualized Loss Expectancy (ALE)
Why it's wrong here
ALE accounts for frequency, not the magnitude of a single event.
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Annualized Rate of Occurrence (ARO)
Why it's wrong here
ARO is a frequency metric, not a financial exposure metric.
About these practice questions
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JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed August 2026 · checked against the official (ISC)² exam blueprint
This ISC practice question is part of Courseiva's free (ISC)² 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 ISC exam.