Joe, the system administrator, has been asked to calculate the Annual Loss Expectancy (ALE) for a $5,000
server, which often crashes. In the past year, the server has crashed 10 times, requiring a system reboot
to recover with only 10% loss of data or function. Which of the following is the ALE of this server?

A.
$500

B.
$5,000

C.
$25,000

D.
$50,000

Explanation:
SLE × ARO = ALE, where SLE is equal to asset value (AV) times exposure factor (EF); and ARO is the
annualized rate of occurrence.
(5000 x 10) x 0.1 = 5000
Incorrect Answers:
A: 500 is the sum of a single failure only and the question mentions that the failure occurs 10 times per
year.C: 25000 would be the ALE if the server itself costs 10 times more than is stated or the system can be
recovered with a 25% loss of data or function.
D: 50000 would be the sum if the server cannot be recovered or the failure occurs 100 times per year.

Dulaney, Emmett and Chuck Eastton, CompTIA Security+ Study Guide, 6th Edition, Sybex, Indianapolis,
2014, pp. 5-6
http://www.ciscopress.com/articles/article.asp?p=1998559&seqNum=2