What is annual loss expectancy?
Understand the Problem
The question is asking for an explanation of the concept of annual loss expectancy, which is a risk management metric used to quantify the expected loss due to a specific risk over a year.
Answer
Annual Loss Expectancy (ALE) is the expected monetary loss from a risk over one year.
Annual Loss Expectancy (ALE) is a calculation used in risk management to determine the expected monetary loss for an asset due to a risk over a one-year period.
Answer for screen readers
Annual Loss Expectancy (ALE) is a calculation used in risk management to determine the expected monetary loss for an asset due to a risk over a one-year period.
More Information
ALE is calculated using the formula: ALE = Single Loss Expectancy (SLE) x Annual Rate of Occurrence (ARO), where SLE is the monetary value of a single loss and ARO is the expected frequency of the risk occurring in a year.
Tips
One common mistake is confusing ALE with SLE. Ensure you understand that ALE projects annual loss due to risk occurrence frequency.
Sources
- Annual Loss Expectancy (ALE) - Techopedia - techopedia.com
- What is Annual Loss Expectancy (ALE)? - CSRC NIST - csrc.nist.gov
