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Annual Loss Expectancy (ALE)

The possible yearly cost of all instances of a specific realized threat against a specific asset. The ALE is calculated using the formula ALE = single loss expectancy (SLE) * annualized rate of occurrence (ARO). In risk assessment, the average monetary value of losses per year.


Similar items:
The expected frequency that a specific threat or risk will occur (in other words, become realized) within a single year. Also known as probability determination.
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The cost associated with a single realized risk against a specific asset. The SLE indicates the exact amount of loss an organization would experience if an asset were harmed by a specific threat. SLE = asset value ($) - exposure factor (EF).
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Possibility that a particular threat will adversely impact an information system by exploiting a particular vulnerability. The likelihood that any specific threat will exploit a specific vulnerability to cause harm to an asset. Risk is an assessment of probability, possibility, or chance. Risk = threat - vulnerability. The probability that a particular security threat will exploit a particular vulnerability.
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The ability of an organization to absorb the losses associated with realized risks.
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A project to identify the threats that exist over key information and information technology. The threat analysis usually also defines the level of the threat and likelihood of that threat to materialize. Examination of information to identify the elements comprising a threat.
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