Question

Single Loss Expectancy (SLE) is the expected monetary loss every time a risk occurs, SLE=AV * EF (where AV is the asset value and EF is the exposure factor whose value can be from 0 to 1). For example, a server (an important asset) with a value of 50000. The probability of exposure to attack on that asset due to the attack is 0.6. Then the SLE will be 50000*0.6=30000.

Annualized Loss Expectancy is the expected monetary loss that can be expected for an asset due to risk over a one-year period. It is calculated as follows:
ALE =SLE * ARO where ARO is the annualized rate occurrence. It means how often the risk is likely to occur within one year. Considering the risk may occur every two-year interval then The ALE can be calculated as follows:
ALE =30000 *0.5 =15000
You need to calculate the SLE and ALE for the most important asset which you have identified in Task 2.

Answer 1

To calculate the SLE, multiply the asset's value (AV) by its exposure factor (EF). To calculate the ALE, multiply the SLE by the annualized rate of occurrence (ARO). These calculations help assess the expected yearly cost of risks to the asset.

Step-by-step explanation:

The Single Loss Expectancy (SLE) is the expected monetary loss each time a risk occurs and is calculated by multiplying the asset value (AV) by the exposure factor (EF). For example, if a server has a value of $50,000 and the probability of exposure to attack is 0.6, the SLE would be $50,000 * 0.6 = $30,000.

To calculate the Single Loss Expectancy (SLE) for your most important asset, you'll need to define the Asset Value (AV) and the Exposure Factor (EF). The SLE is computed by multiplying the AV by the EF. For example, if your asset is valued at $100,000 and the exposure factor is 0.4 due to a specific risk, then the SLE would be $100,000 * 0.4 = $40,000.

The Annualized Loss Expectancy (ALE) is calculated by multiplying the SLE by the Annual Rate of Occurrence (ARO). If a specific risk is expected to occur every four years, this would mean an ARO of 0.25 (1 occurrence every 4 years). Using the previous SLE of $40,000, the ALE would be $40,000 * 0.25 = $10,000. Therefore, you can anticipate this risk to cost $10,000 per year over the long run.