Final answer:
To find the Annual Loss Expectancy (ALE), you multiply the Single Loss Expectancy (SLE) by the Annual Rate of Occurrence (ARO). In this case, with an SLE of $25,000 and an ARO of 0.25 (once every four years), the ALE is calculated to be $6,250, which is option A.
Step-by-step explanation:
If you calculate the Single Loss Expectancy (SLE) to be $25,000 and that there will be one occurrence every four years (Annual Rate of Occurrence or ARO), then the Annual Loss Expectancy (ALE) is calculated by multiplying the SLE by the ARO.
The ALE formula is:
ALE = SLE × ARO
In this case, the calculation would be:
ALE = $25,000 × (1 occurrence / 4 years)
Therefore, the ALE would be:
ALE = $25,000 × 0.25
ALE = $6,250
This means that the expected annual cost due to this risk is $6,250, which corresponds to option A.The Annualized Loss Expectancy (ALE) can be calculated by multiplying the Single Loss Expectancy (SLE) with the Annual Rate of Occurrence (ARO). In this case, the SLE is $25,000 and the ARO is one occurrence every four years. Therefore, the ALE would be $25,000 * 0.25 (since there is one occurrence every four years) which equals $6,250.