Question

Which two values are required to calculate annual loss expectancy?

Answer 1

Answer:

In calculating risk, there are two general formulas that are used: SLE (single loss expectancy) and ALE (annualized loss expectancy). SLE is the starting point to determine the single loss that would occur if a specific item occurred. The formula for the SLE is: SLE = asset value × exposure factor.

Answer 2

The two values required to calculate annual loss expectancy are the Annual Rate of Occurrence and the Single Loss Expectancy.

Explanation:

• The annualized loss expectancy is the product of the annual rate of occurrence (ARO) and the single loss expectancy (SLE).
• Annual loss expectancy is a calculation that helps you to determine the expected monetary loss for an asset due to a particular risk over a single year.
• ALE determines the cost of the risk.

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