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Question:
How to calculate the annual loss expectancy (ALE) that may happen because of a threat?
A
Single loss expectancy (SLE) × annual rate of occurrence (ARO)
explanation
ALE (annual loss expectancy) is the product of the ARO (annual rate of occurrence) and the SLE (single loss expectancy) and is mathematically expressed as ALE = ARO × SLE. Single loss expectancy is the cost of any single loss, and it is mathematically expressed as SLE = AV (asset value) × EF (exposure factor).
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