A financial analytics firm is conducting a quantitative risk assessment on its real-time m… — CompTIA Security+

A financial analytics firm is conducting a quantitative risk assessment on its real-time market data feed server. The server has an Asset Value ( $AV$ ) of $\$900,000$ . Historical security data indicates that a major data breach occurs once every five years ( $ARO = 0.20$ ). If the calculated Annualized Loss Expectancy ( $ALE$ ) for this threat vector is $\$45,000$ , what is the Exposure Factor ( $EF$ ) of a single security breach?

$25\%$ Answer
B
$10\%$
C
$40\%$
D
$50\%$

Answer

The Exposure Factor resulting from a single security breach is 25%.

The quantitative risk assessment formula relates Annualized Loss Expectancy (

ALE

), Single Loss Expectancy (

SLE

), Annual Rate of Occurrence (

ARO

), Asset Value (

AV

), and Exposure Factor (

EF

) through two core equations:

ALE = SLE \times ARO

and

SLE = AV \times EF

. Substituting the given values (

ALE = \$45,000

and

ARO = 0.20

) yields

SLE = \$45,000 / 0.20 = \$225,000

. Substituting

SLE = \$225,000

and

AV = \$900,000

into the second formula yields

EF = \$225,000 / \$900,000 = 0.25

, or

25\%

Step-by-Step Solution

Calculate the Single Loss Expectancy (SLE) from Annualized Loss Expectancy (ALE) and Annual Rate of Occurrence (ARO).

SLE = \frac{ALE}{ARO} = \frac{\$45,000}{0.20} = \$225,000

ALE is defined as

ALE = SLE \times ARO

. Rearranging the formula isolates

SLE

Calculate the Exposure Factor (EF) from Single Loss Expectancy (SLE) and Asset Value (AV).

EF = \frac{SLE}{AV} = \frac{\$225,000}{\$900,000} = 0.25 = 25\%

SLE is defined as

SLE = AV \times EF

. Rearranging the formula isolates

EF

Key Concept

Quantitative Risk Assessment (ALE, SLE, ARO, and EF calculations)

Estimated Time:1m 30s

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