Annual Loss Expectancy (ALE) is a key financial metric used in risk management to estimate the potential dollar loss per year due to a specific risk. It is calculated as:
ALE = Single Loss Expectancy (SLE) × Annual Rate of Occurrence (ARO).
This helps quantify the financial impact of a threat, allowing better prioritization and budgeting for mitigation efforts.
B (Probability) is part of the ALE calculation but not a dollar-value measure.
C (Criticality) relates to function importance but not direct financial impact.
D (Risk) is broader and includes impact and likelihood, but ALE specifically quantifies impact in dollars.
[References:, PSP Study Guide – Risk Assessment Metrics, POA Manual – Cost of Risk and Loss Expectancy]
Contribute your Thoughts:
Chosen Answer:
This is a voting comment (?). You can switch to a simple comment. It is better to Upvote an existing comment if you don't have anything to add.
Submit