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Question:
A security analyst is assessing the potential cost to the company in the event of a breach of the customer database, which contains 2,500 personally identifiable information (PI) records. According to studies, the cost per record in the event of a breach is $300. The likelihood of a breach occurring in the next year is only 5 percent. What would be the Annualized Loss Expectancy (ALE) for a security breach?
A
$37,500.
explanation
ALE (annual loss expectancy) = SLE (single loss expectancy) × ARO (annualized rate of occurrence). SLE equals $750,000 (2,500 records × $300), and ARO equals 5%, so $750,000 times 5% equals $37,500.
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