You are conducting a quantitative risk assessment for an organization to identify the risk of a fire in a data center. The data center is valued at $10 million and you expecta fire to occur once every 50 years that will damage three-quarters of the data center(including equipment). What is your annualized loss expectancy?
A. 75 percent
B. $7.5 million
D. Correct: The annualized loss expectancy is calculated as the product of the single loss expectancy and the annualized rate of occurrence. The SLE is the asset value($10 million) multiplied by the exposure factor (75 percent), or $7.5 million. The ARO is once every 50 years, or 0.02. The ALE is, therefore, $7,500,000 × 0.02 or$150,000.
(this multiple choice question has been scrambled)