Question

Consider the following scenario: The asset value of your company's primary servers is $2 million. Tornadoes in this part of the country are not uncommon, and it is estimated that one will level the building every 60 years. Which of the following is the SLE for the scenario?

A. $2 million
B. $1 million
C. $500,000
D. $33,333.33
E. $16,666.67

Answer 1

The Single Loss Expectancy (SLE) for the scenario is $33,333.33 (option D). This means that on average, the company can expect to lose $33,333.33 each time a tornado levels the building.

Step-by-step explanation:

The Single Loss Expectancy (SLE) for the scenario is $33,333.33 (option D).

The SLE is calculated by dividing the total asset value ($2 million) by the estimated frequency of occurrence (1 tornado every 60 years). In this case, the SLE is $2 million / 60 = $33,333.33.

This means that on average, the company can expect to lose $33,333.33 each time a tornado levels the building.

Single-loss expectancy is the monetary value expected from the occurrence of a risk on an asset. It is related to risk management and risk assessment. Single-loss expectancy is mathematically expressed as Where the exposure factor is represented in the impact of the risk over the asset, or percentage of asset lost.