Annualized Loss Expectancy
Encyclopedia
The annualized loss expectancy (ALE) is the product of the annual rate of occurrence (ARO) and the single loss expectancy
. It is mathematically expressed as:
Suppose than an asset is valued at $100,000, and the exposure factor
(EF) for this asset is 25%. The single loss expectancy
(SLE) then, is 25% * $100,000, or $25,000.
The annualized loss expectancy is the product of the annual rate of occurrence (ARO) and the single loss expectancy
.
ALE = ARO * SLE
For an annual rate of occurrence of one, the annualized loss expectancy is 1 * $25,000, or $25,000.
For an ARO of three, the equation is:
ALE = 3 * $25,000
Therefore:
ALE = $75,000
Single loss expectancy
Single Loss Expectancy is a term related to Risk Management and Risk Assessment. It can be defined as the monetary value expected from the occurrence of a risk on an asset.It is mathematically expressed as:...
. It is mathematically expressed as:
Suppose than an asset is valued at $100,000, and the exposure factor
Exposure Factor
Exposure Factor 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 must define....
(EF) for this asset is 25%. The single loss expectancy
Single loss expectancy
Single Loss Expectancy is a term related to Risk Management and Risk Assessment. It can be defined as the monetary value expected from the occurrence of a risk on an asset.It is mathematically expressed as:...
(SLE) then, is 25% * $100,000, or $25,000.
The annualized loss expectancy is the product of the annual rate of occurrence (ARO) and the single loss expectancy
Single loss expectancy
Single Loss Expectancy is a term related to Risk Management and Risk Assessment. It can be defined as the monetary value expected from the occurrence of a risk on an asset.It is mathematically expressed as:...
.
ALE = ARO * SLE
For an annual rate of occurrence of one, the annualized loss expectancy is 1 * $25,000, or $25,000.
For an ARO of three, the equation is:
ALE = 3 * $25,000
Therefore:
ALE = $75,000