29. A security analyst has determined that a security breach would have a financial impact of $15,000 and is expected to occur twice within a three-year period. Which of the following is the ALE for this risk?
Answer: B
The ALE for this risk is $10,000.
The Annualized Loss Expectancy (ALE) is calculated by determining the potential financial impact of a risk and the frequency of that risk. In this case, the financial impact of a single breach is $15,000, and with two expected breaches over three years, the ALE is calculated as $15,000 multiplied by the frequency per year.
A) $7,500
This option is incorrect because it does not accurately reflect the calculation of the ALE. The ALE is based on the total expected losses over a year, which in this case would be higher than $7,500.
B) $10,000
This is the correct answer. The ALE is calculated by taking the total expected loss of $30,000 (from two breaches of $15,000 each) and dividing it by the three-year period, resulting in an ALE of $10,000 per year.
C) $15,000
This option is incorrect as it reflects the financial impact of a single breach rather than the annualized calculation based on multiple breaches. The ALE should consider the frequency of occurrences, which this option does not.
D) $30,000
This option is incorrect because it represents the total potential loss from two breaches over the full three-year period rather than the annualized loss expectancy. The ALE specifically looks at the average annual loss, which is lower than this amount.
Conclusion
The correct answer, $10,000, accurately represents the Annualized Loss Expectancy for the risks outlined in the question. Other options fail to consider the frequency of the breach events or misrepresent the financial impact in relation to the annualized calculation. Thus, option B is the only choice that correctly aligns with the defined risk analysis.