Risk Analysis, Management and Assessment : Single Loss Expectancy
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Single Loss Expectancy is a term related to Risk Management and Risk Assessment. It can be defined as the monetary value expected from the occurrence of a risk on an asset.
Mathematically expressed as:
Single Loss Expectancy (SLE) = Asset Value (AV) X Exposure Factor
Where the Exposure Factor is represented in the impact of the risk over the asset, or percentage of asset lost. As an example, if the value of the asset is reduced two thirds, the exposure factor value is .66. If the asset is completely lost, the Exposure Factor is 1.0. The result is a monetary value in the same unit as the Single Loss Expectancy is expressed (euros, dollars, yens, etc)
The Annualized Loss Expectancy (ALE) = SLE X Annualized Rate of Occurrence (ARO)
15. A company has a chance 1 in 3,000 of being within ten miles of an earthquake epicenter measuring 5.0 on the Richter scale. The Earthquake will cause $60 million of loss.
What would be the budget for reducing or preventing that damage?
16. A company has one large router that ties all their network segments. If the router dies it will take one day to repair. There is 70% chance that failure will occur once every 24 months. The outage will cause 1000 people to be out of work for a day. The company estimates the loss of productivity to be $68,000
How much should you spend for router redundancy?
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