Question 1easymultiple choice
Full question →- A
$200,000
Why wrong: This is SLE, not ALE.
- B
$500,000
Why wrong: This is the asset value, not ALE.
- C
$100,000
Correctly calculated as AV * EF * ARO.
- D
$250,000
Why wrong: This is half of AV, not ALE.
Question 499 of 504
Quick Answer
The answer is $100,000. This is correct because the annualized loss expectancy (ALE) calculation requires first determining the single loss expectancy (SLE) by multiplying the asset value of $500,000 by the exposure factor of 40%, which yields $200,000, then multiplying that SLE by the annual rate of occurrence of 0.5 to arrive at $100,000. On the Systems Security Certified Practitioner SSCP exam, this quantitative risk analysis formula tests your ability to apply the standard NIST SP 800-30 methodology, often appearing in scenario-based questions where you must distinguish between SLE, ARO, and ALE. A common trap is forgetting to compute SLE first or misplacing the decimal in the ARO, so always verify that the exposure factor is expressed as a decimal. A helpful memory tip is to think of ALE as "SLE times how often it happens," or simply remember the sequence: Asset Value times Exposure Factor equals SLE, then SLE times ARO equals ALE.
SSCP Risk Identification, Monitoring and Analysis Practice Question
This SSCP practice question tests your understanding of risk identification, monitoring and analysis. 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 quantitative risk analysis, the asset value is $500,000, the exposure factor is 40%, and the annual rate of occurrence is 0.5. What is the annualized loss expectancy (ALE)?
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
✓
$100,000
The annualized loss expectancy (ALE) is calculated as single loss expectancy (SLE) multiplied by the annual rate of occurrence (ARO). SLE is asset value ($500,000) times exposure factor (40%) = $200,000. ALE = $200,000 × 0.5 = $100,000. This is the standard quantitative risk analysis formula per NIST SP 800-30.
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.
- ✗
$200,000
Why it's wrong here
This is SLE, not ALE.
- ✗
$500,000
Why it's wrong here
This is the asset value, not ALE.
- ✓
$100,000
Why this is correct
Correctly calculated as AV * EF * ARO.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
$250,000
Why it's wrong here
This is half of AV, not ALE.
Common exam traps
Common exam trap: answer the scenario, not the keyword
ISC2 often tests the distinction between SLE and ALE, trapping candidates who compute the SLE ($200,000) and stop there, forgetting to multiply by the ARO (0.5) to get the annualized value.
Detailed technical explanation
How to think about this question
In quantitative risk analysis, the exposure factor (EF) represents the percentage of asset value lost per incident, and the annual rate of occurrence (ARO) is the expected frequency per year. The ALE formula (SLE × ARO) is foundational for prioritizing risk mitigation, as it converts potential losses into an annual cost metric. Real-world scenarios often involve adjusting the ARO based on historical data or threat intelligence, and the EF may vary with different threat types (e.g., natural disaster vs. cyberattack).
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 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
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FAQ
Questions learners often ask
What does this SSCP question test?
Risk Identification, Monitoring and Analysis — This question tests Risk Identification, Monitoring and Analysis — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: $100,000 — The annualized loss expectancy (ALE) is calculated as single loss expectancy (SLE) multiplied by the annual rate of occurrence (ARO). SLE is asset value ($500,000) times exposure factor (40%) = $200,000. ALE = $200,000 × 0.5 = $100,000. This is the standard quantitative risk analysis formula per NIST SP 800-30.
What should I do if I get this SSCP 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.
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
1 more ways this is tested on SSCP
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. An organization wants to perform a risk analysis for a new cloud application. Which quantitative metric is most commonly used to calculate risk?
easy- A.Control effectiveness.
- B.Threat likelihood.
- C.Residual risk.
- ✓ D.Annualized Loss Expectancy (ALE).
Why D: Annualized Loss Expectancy (ALE) is the most commonly used quantitative metric for calculating risk because it combines the expected financial loss from a single event (Single Loss Expectancy) with the annual frequency of that event (Annualized Rate of Occurrence). This produces a dollar-value risk figure that organizations can directly compare against security control costs and budget decisions for a cloud application.
Last reviewed: Jun 30, 2026
This SSCP 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 SSCP exam.
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