Certified in Risk and Information Systems Control (CRISC) — Question 1066

Which of the following is true for Single loss expectancy (SLE), Annual rate of occurrence (ARO), and Annual loss expectancy (ALE)?

Answer options

• A. ALE= ARO/SLE
• B. ARO= SLE/ALE
• C. ARO= ALE*SLE
• D. ALE= ARO*SLE

Correct answer: D

Explanation

The correct formula is ALE = ARO * SLE, which indicates that the Annual Loss Expectancy is calculated by multiplying the Single Loss Expectancy by the Annual Rate of Occurrence. Options A, B, and C misrepresent the relationships among these financial risk metrics, leading to incorrect calculations.