Can somebody explain in comments how is the given answer A. From what we know ARO is 0.2 (3times/15years) ALE=ARO x SLE = 0.2 x 70,000 = 14,000

70000*3/15 210000/15 =14000

ALE = ARO x SLE ARO = (Number of Failures) / (Number of Years) ARO = 3 / 15 ARO = 0.2 (per year) Total SLE = 70,000 Therefore, ALE is 0.2 x 70,000 = 14,000

...so lets just sitback an imagine if ExamTopics gave the correct suggested answer 100% of the time...EVERYONE WOULD PASS!!...then the significance of having a CISSP certification would carry much less meaning. Some people will choose this suggested answer on the test through memorization. Just saying

C is the answer Breakdown: There have been 3 electrical failures over 15 years Each failure cost: Availability: $60,000 Integrity: $10,000 Confidentiality: $0 Total Impact: $70,000 To calculate the Annualized Loss Expectancy (ALE): There have been 3 failures in 15 years So the estimated frequency is 3/15 = 0.2 failures per year The cost per failure is $70,000 So the ALE is: ALE = Annualized frequency x Cost per failure ALE = 0.2 x $70,000 = $14,000 Therefore, with a frequency of 0.2 failures per year, and a cost of $70,000 per failure, the reasonable annual loss expectation is $14,000.

SLE -70000 -Never mention any percentage for every year. So SLE =70000 ARO=3/15=0.2 ALE=ARO*SLE=0.2*70000=14,000

If the company has implemented measures that reduce the impact of each failure by 25% and the total impact is $70,000, then the adjusted impact of each failure would be $17,500. Using ARO of 0.2 failures per year, we can calculate ALE (annual loss expectation) as: ALE = 0.2 x $17,500 = $3,500 This is the only logic I see to get to their answer (A) but they didn't mention anything about any measures to reduce the impact so answer C is the correct one.

Moderators, Can you fix the answer on this or explain why $3,500 is the answer? Straight from CISSP Sixth edition: The Annualized Loss Expectancy (ALE) is the expected loss from each identified threat on an annual basis. It is equal to the likelihood times the impact: ALE = ARO * SLE.

70,000 once every 5 years 70,000/5 = 14,000

70000/15 =4,666.67, A is close to this , A is right