Quick Answer
The answer is $250,000. This net benefit is derived from the CISSP ALE calculation by first determining the reduction in annual loss expectancy, which is the original ALE of $500,000 minus the new ALE of $50,000, yielding a $450,000 reduction. Subtracting the $200,000 cost of the flood barriers from that reduction gives the net benefit of $250,000, directly applying the risk management cost-benefit analysis formula: Net Benefit = (ALE_old - ALE_new) - Cost_of_control. On the CISSP exam, this tests your ability to distinguish between the reduction in ALE and the net benefit, a common trap where candidates forget to subtract the control cost. Remember the memory tip: “Reduce first, then subtract the cost” to avoid picking the $450,000 reduction as the final answer.
This CISSP practice question tests your understanding of security and risk management. 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 risk assessment, a company identifies that its primary data center is located in a flood-prone area. The estimated annual loss expectancy (ALE) for a flood event is $500,000. Installing flood barriers costs $200,000 and reduces the ALE to $50,000. What is the net benefit of implementing the flood barriers?
Clue words in this question
Noticing these words before you look at the options changes how you read each choice.
Clue: "primary"
Why it matters: Asks for the main purpose or function, not a secondary benefit. Eliminate answers that describe side-effects or partial functions.
$300,000
Why wrong: Incorrect - this is the reduction in ALE but does not subtract the cost.
$250,000
Correct - reduction in ALE ($450,000) minus cost ($200,000) = $250,000.
$450,000
Why wrong: Incorrect - this is the ALE reduction before cost.
$200,000
Why wrong: Incorrect - this is just the cost of control.
Answer choices
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 net benefit is calculated as the reduction in ALE minus the cost of the control. The original ALE is $500,000, and after implementing flood barriers the ALE drops to $50,000, a reduction of $450,000. Subtracting the $200,000 cost of the barriers yields a net benefit of $250,000. This aligns with the CISSP risk management formula: Net Benefit = (ALE_old - ALE_new) - Cost_of_control.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
$300,000
Why it's wrong here
Incorrect - this is the reduction in ALE but does not subtract the cost.
$250,000
Why this is correct
Correct - reduction in ALE ($450,000) minus cost ($200,000) = $250,000.
Clue confirmation
The clue word "primary" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
$450,000
Why it's wrong here
Incorrect - this is the ALE reduction before cost.
$200,000
Why it's wrong here
Incorrect - this is just the cost of control.
Common exam traps
The trap here is that candidates often forget to subtract the cost of the control from the reduction in ALE, leading them to select the $450,000 reduction as the net benefit instead of the correct $250,000.
Detailed technical explanation
The Annual Loss Expectancy (ALE) is computed as Single Loss Expectancy (SLE) × Annualized Rate of Occurrence (ARO). In this scenario, the flood barriers reduce the ARO (frequency) or SLE (impact) enough to drop the ALE from $500,000 to $50,000. The net benefit calculation is a core part of cost-benefit analysis for risk mitigation decisions, ensuring that the cost of a safeguard does not exceed the risk reduction it provides. In real-world risk management, this helps justify capital expenditures on physical security controls like flood barriers, fire suppression systems, or biometric access controls.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
A security analyst at a medium-sized enterprise encounters this scenario during an investigation or architecture review. The correct answer reflects best practice for the specific threat or control described. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Security exam questions test whether you can match controls to threats in context — not just recall definitions.
What to study next
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
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FAQ
Security and Risk Management — This question tests Security and Risk Management — Read the scenario before looking for a memorised answer..
The correct answer is: $250,000 — The net benefit is calculated as the reduction in ALE minus the cost of the control. The original ALE is $500,000, and after implementing flood barriers the ALE drops to $50,000, a reduction of $450,000. Subtracting the $200,000 cost of the barriers yields a net benefit of $250,000. This aligns with the CISSP risk management formula: Net Benefit = (ALE_old - ALE_new) - Cost_of_control.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Yes — watch for: "primary". Asks for the main purpose or function, not a secondary benefit. Eliminate answers that describe side-effects or partial functions.
Read the scenario before looking for a memorised answer.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
Same concept, more angles
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. A company is conducting a risk assessment and needs to prioritize risks based on both likelihood and impact. The risk management team decides to use a quantitative approach. Which of the following is a key advantage of using quantitative risk analysis over qualitative risk analysis?
mediumWhy A: Quantitative risk analysis assigns monetary values to assets, threats, and vulnerabilities, enabling precise cost-benefit calculations for risk mitigation options. This allows organizations to compare the cost of controls directly against the expected loss, a key advantage over qualitative methods that rely on subjective rankings.
Variation 2. A security manager is conducting a risk assessment for a new cloud application. The manager needs to estimate the potential financial loss from a data breach. Which approach should be used?
mediumWhy D: Quantitative risk analysis assigns monetary values to assets, threats, and impacts, allowing calculation of SLE, ARO, and ALE. Qualitative analysis uses subjective scales and is not monetary.
Last reviewed: Jun 11, 2026
This CISSP practice question is part of Courseiva's free ISC2 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 CISSP exam.
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