The annualized loss expectancy (ALE)
is the product of the
annual rate of occurrence
Broadly speaking, a risk assessment is the combined effort of:
# identifying and analyzing potential (future) events that may negatively impact individuals, assets, and/or the environment (i.e. hazard analysis); and
# making judgments "on the to ...
(ARO) and the
single loss expectancy Single-loss expectancy (SLE) 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:
= \times
Where the exposure f ...
(SLE). It is mathematically expressed as:
:
Suppose that an asset is valued at $100,000, and the
Exposure Factor
Exposure factor (EF) is the subjective, potential percentage of loss to a specific asset if a specific threat is realized. The exposure factor is a subjective value that the person assessing risk
In simple terms, risk is the possibility of some ...
(EF) for this asset is 25%. The
single loss expectancy Single-loss expectancy (SLE) 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:
= \times
Where the exposure f ...
(SLE) then, is 25% * $100,000, or $25,000.
The annualized loss expectancy is the product of the
annual rate of occurrence
Broadly speaking, a risk assessment is the combined effort of:
# identifying and analyzing potential (future) events that may negatively impact individuals, assets, and/or the environment (i.e. hazard analysis); and
# making judgments "on the to ...
(ARO) and the
single loss expectancy Single-loss expectancy (SLE) 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:
= \times
Where the exposure f ...
.
ALE = ARO * SLE
For an annual rate of occurrence of 1, the annualized loss expectancy is 1 * $25,000, or $25,000.
For an ARO of 3, the equation is:
ALE = 3 * $25,000. Therefore:
ALE = $75,000
See also
*
Single loss expectancy Single-loss expectancy (SLE) 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:
= \times
Where the exposure f ...
References
{{Reflist
Financial risk