If the SLE for a system is $5,000 and the ARO is 2, what is the ALE?

To determine the Annual Loss Expectancy (ALE), you can use the formula:

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

In this scenario, the Single Loss Expectancy (SLE) is $5,000, and the Annual Rate of Occurrence (ARO) is 2. By substituting these values into the formula, you get:

ALE = $5,000 × 2 = $10,000.

This means the expected annual loss from this particular risk is $10,000. The ALE provides a financial metric that helps in assessing the potential impact of threats and vulnerabilities on the organization over a year, guiding decision-making in risk management and resource allocation. Understanding this calculation is crucial for any professional involved in security management or risk assessment, as it enables better budgeting and proactive measures to mitigate losses.