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CompTIA Security+ · CompTIA
Select one answer.
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The most useful metric in determining whether the long-term cost to transfer a risk is less than the impact of the risk is the Annualized Loss Expectancy (ALE). ALE is calculated by multiplying the Annual Rate of Occurrence (ARO) by the Single Loss Expectancy (SLE).
ALE (Annualized Loss Expectancy) is the correct answer because it combines both the potential impact of a single event and the frequency of that event occurring to provide a comprehensive financial estimate. This allows an organization to effectively compare the long-term costs of risk transfer strategies against the expected impact of the risk.
ARO: Annual Rate of Occurrence RTO: Recovery Time Objective RPO: Recovery Point Objective ALE: Annual Loss Expectancy SLE: Single Loss Expectancy