Annualized Loss Expectancy (ALE): A calculation used in risk management to estimate the yearly cost of potential losses from an identified risk. It is determined by multiplying the Annual Rate of Occurrence (ARO) of an event by the Single Loss Expectancy (SLE), which is the cost of a single occurrence of that event. ALE helps organizations prioritize risks and make informed decisions about where to invest in security measures. It’s calculated using the formula ALE = ARO x SLE. ARO (Annual Rate of Occurrence) – The estimated frequency at which a specific threat or event is expected to occur within a one-year period. SLE (Single Loss Expectancy) – The estimated monetary loss or impact from a single occurrence of a specific threat or event.
Categories: CC D1: Security Principles | CCSP D6: Legal - Risk and Compliance | CISM D2: Information security risk management | CISSP D1: Security and Risk Management | Security+ D5: Security Program Management and Oversight | SSCP D3: Risk Identification Monitoring and Analysis
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