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Which two values are required to calculate annual loss expectancy? (Choose two.)Select one or more:frequency factorexposure factorannual rate of occurrencequantitative loss valuesingle loss expectancyasset value

Question

Which two values are required to calculate annual loss expectancy? (Choose two.)Select one or more:frequency factorexposure factorannual rate of occurrencequantitative loss valuesingle loss expectancyasset value

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Solution

The two values required to calculate Annual Loss Expectancy (ALE) are:

  1. Single Loss Expectancy (SLE): This is the monetary value expected to be lost in a single incident. It is calculated by multiplying the asset value by the exposure factor (the percentage of loss a specific threat would have on a specific asset).

  2. Annual Rate of Occurrence (ARO): This is an estimate of how often a threat would occur in a year.

The ALE is then calculated by multiplying the SLE by the ARO.

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