Risk Management
Read this page and watch the video to learn more about the purpose of risk management and the four stages of the risk management process. Before you move on, make sure you have a good understanding of the formulas, and that you are able to use the formulas on this page to calculate single loss expectancy (SLE), annual rate of occurrence (ARO), and annual loss expectancy (ALE).
Instruction
Annual Loss Expectancy (ALE)
ALE provides an estimate of the yearly financial impact to the organization from a particular risk.
This helps determine how much money the organization is justified in spending on countermeasures in order to reduce the likelihood or impact of an incident.
This helps determine how much money the organization is justified in spending on countermeasures in order to reduce the likelihood or impact of an incident.
Annualized Loss Expectancy = Single Loss Expectancy * Annual Rate of Occurrence
ALE = SLE * ARO