Which definition best describes the Single Loss Expectancy (SLE) formula used to calculate expected losses? a. The expected monetary loss over a one-year period b. The expected monetary loss the first time a risk occurs c. The expected monetary loss over time waiting for a risk to occur d. The expected monetary loss every time a risk occurs
The Correct Answer and Explanation is :
The correct answer is: b. The expected monetary loss the first time a risk occurs.
Explanation:
Single Loss Expectancy (SLE) is a key concept in risk management and information security. It represents the monetary loss that would result from a single occurrence of a specific risk or threat. The formula for SLE is calculated as:
SLE = Asset Value (AV) × Exposure Factor (EF)
- Asset Value (AV): This is the total value of the asset at risk, such as the worth of a data system, intellectual property, or physical equipment.
- Exposure Factor (EF): This refers to the percentage of the asset value that is expected to be lost due to the occurrence of a risk or threat.
The key point to understand is that SLE is focused on a single event and calculates the financial impact or loss that would be experienced from the event the first time it happens. It is a snapshot of the potential financial damage caused by a risk in a single occurrence. SLE does not account for the frequency or repetition of events over time; instead, it focuses on the initial impact.
In contrast:
- Option a refers to an annual calculation, which is closer to the Annual Loss Expectancy (ALE) formula, which considers the frequency of risk occurrence in a year.
- Option c suggests an ongoing or waiting period, which does not apply to SLE as it only calculates a loss for the first event.
- Option d refers to repetitive occurrences, which would align more with ALE rather than SLE, as ALE looks at multiple incidents over a year.
SLE is particularly useful for organizations when they need to assess the impact of a risk and make informed decisions about security investments. It helps quantify potential losses in case a risk event occurs, allowing organizations to take appropriate actions.
Now, I’ll generate an image to visually explain this concept.
Here is an infographic that visually explains the concept of Single Loss Expectancy (SLE). It includes the formula and a breakdown of the asset value (AV) and exposure factor (EF) to show how the expected monetary loss is calculated for the first occurrence of a risk. Let me know if you’d like further details or adjustments!
