Which of the following terms related to risk management represents the estimated frequency at
which a threat is expected to occur?

A.
Safeguard

B.
Single Loss Expectancy (SLE)

C.
Exposure Factor (EF)

D.
Annualized Rate of Occurrence (ARO)

Explanation:
The Annualized Rate of Occurrence (ARO) is a number that represents the estimated frequency at
which a threat is expected to occur. It is calculated based upon the probability of the event occurring
and the number of employees that could make that event occur.
Answer option C is incorrect. The Exposure Factor (EF) represents the % of assets loss caused by a
threat. The EF is required to calculate the Single Loss Expectancy (SLE).
Answer option A is incorrect. Safeguard acts as a countermeasure for reducing the risk associated
with a specific threat or a group of threats.
Answer option B is incorrect. Single Loss Expectancy is a term related to Risk Management and Risk
Assessment. It can be defined as the monetary value expected from the occurrence of a risk on an
asset. It is mathematically expressed as follows.
Single Loss Expectancy (SLE) = Asset Value (AV) * Exposure Factor (EF)

where the Exposure Factor is represented in the impact of the risk over the asset, or percentage of
asset lost. As an example, if the Asset Value is reduced two thirds, the exposure factor value is .66. If
the asset is completely lost, the Exposure Factor is 1.0. The result is a monetary value in the same
unit as the Single Loss Expectancy is expressed.
GSLC Course Manual, Contents. “Risk Management”