Annual Loss Expectancy is derived from the function of which two factors?

 Definition of Annual Loss Expectancy (ALE)

ALE is a quantitative risk analysis metric used to estimate the annual financial impact of a risk.

Formula: ALE = Annual Rate of Occurrence (ARO) × Single Loss Expectancy (SLE)

 Key Components

Annual Rate of Occurrence (ARO): The estimated frequency of a specific risk occurring in a year.

Single Loss Expectancy (SLE): The financial impact of a single occurrence of the risk, calculated as Asset Value × Exposure Factor.

 Comparison of Options

A. Annual Rate of Occurrence and Asset Value: Asset Value is used indirectly in SLE but not directly with ARO.

B. Single Loss Expectancy and Exposure Factor: These factors combine to calculate SLE, not ALE.

C. Safeguard Value and Annual Rate of Occurrence: Safeguard Value is unrelated to ALE calculation.

 EC-Council References

EC-Council frameworks and CISO resources consistently highlight ALE as a critical tool for financial risk assessment.