The annual loss expectancy (ALE) formula is based on:
A.
Impact and loss
B.
Risk and mitigation
C.
Frequency and risk
D.
Impact and frequency
The Answer Is:
D
This question includes an explanation.
Explanation:
Annual Loss Expectancy (ALE) is calculated as:
ALE = Single Loss Expectancy (SLE) × Annual Rate of Occurrence (ARO),
which reflects the impact (SLE) and the frequency (ARO) of an event. This formula is a key component in risk assessment for determining expected financial loss.
A, B, and C are partially correct but not the accepted risk formula framework.
[References:, PSP Study Guide – Risk Quantification Techniques, POA Manual – Risk Assessment and ALE Formula]
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