Quick Answer
The answer is $25,000. This is correct because the annualized loss expectancy calculation starts with the current ALE of $50,000 (ARO of 5 multiplied by the SLE of $10,000), then after the control reduces the ARO to 1, the new ALE becomes $10,000, yielding a risk reduction of $40,000; subtracting the $15,000 annual control cost gives a net benefit of $25,000. On the Systems Security Certified Practitioner SSCP exam, this tests your ability to apply the ALE formula in a cost-benefit analysis, a common scenario in risk assessment questions where you must distinguish between gross benefit and net benefit after factoring control costs. A frequent trap is forgetting to subtract the control cost or confusing ARO with SLE, so always verify which variable changed. Memory tip: think “Old ALE minus New ALE, then subtract the control fee” to land on net benefit.
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 risk assessment, a team identifies that the annualized loss expectancy (ALE) for a critical asset is $50,000. A proposed control costs $15,000 per year and will reduce the annualized rate of occurrence (ARO) from 5 to 1. The single loss expectancy (SLE) is unchanged at $10,000. What is the net benefit of implementing the control?
$40,000
Why wrong: This is the ALE reduction, but cost not subtracted.
$10,000
Why wrong: This is the new ALE, not the net benefit.
$35,000
Why wrong: This might be ALE reduction minus something else.
$25,000
ALE reduction minus control cost equals net benefit.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
$25,000
The current ALE is $50,000 (ARO of 5 × SLE of $10,000). With the control, ARO drops to 1, so the new ALE is $10,000 (1 × $10,000). The reduction in ALE is $40,000. Subtracting the annual control cost of $15,000 gives a net benefit of $25,000. This aligns with the formula: Net Benefit = (Old ALE – New ALE) – Annual Control Cost.
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.
$40,000
Why it's wrong here
This is the ALE reduction, but cost not subtracted.
$10,000
Why it's wrong here
This is the new ALE, not the net benefit.
$35,000
Why it's wrong here
This might be ALE reduction minus something else.
$25,000
Why this is correct
ALE reduction minus control cost equals net benefit.
Related concept
Read the scenario before looking for a memorised answer.
Common exam traps
The trap here is that candidates often forget to subtract the annual control cost from the risk reduction (ALE reduction), mistakenly selecting the risk reduction amount ($40,000) as the net benefit.
Detailed technical explanation
The ALE formula (SLE × ARO) is central to quantitative risk analysis. In this scenario, the control reduces the frequency of loss events (ARO) without affecting the magnitude of each loss (SLE). The net benefit calculation ensures that the cost of the control is justified by the actual risk reduction achieved. Real-world implementations often require factoring in additional costs like maintenance or operational overhead, which can shift the net benefit.
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
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FAQ
Risk Identification, Monitoring and Analysis — This question tests Risk Identification, Monitoring and Analysis — Read the scenario before looking for a memorised answer..
The correct answer is: $25,000 — The current ALE is $50,000 (ARO of 5 × SLE of $10,000). With the control, ARO drops to 1, so the new ALE is $10,000 (1 × $10,000). The reduction in ALE is $40,000. Subtracting the annual control cost of $15,000 gives a net benefit of $25,000. This aligns with the formula: Net Benefit = (Old ALE – New ALE) – Annual Control Cost.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Read the scenario before looking for a memorised answer.
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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 risk manager is calculating the annualized loss expectancy (ALE) for a server. The single loss expectancy (SLE) is $5,000 and the annualized rate of occurrence (ARO) is 0.2. What is the ALE?
easyWhy B: The annualized loss expectancy (ALE) is calculated by multiplying the single loss expectancy (SLE) by the annualized rate of occurrence (ARO). Here, SLE = $5,000 and ARO = 0.2, so ALE = $5,000 × 0.2 = $1,000. This represents the expected annual financial loss from the server risk.
Last reviewed: Jun 25, 2026
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