Sara, a security analyst, is trying to prove to management what costs they could incur if their
customer database was breached. This database contains 250 records with PII. Studies show that
the cost per record for a breach is $300. The likelihood that their database would be breached in
the next year is only 5%. Which of the following is the ALE that Sara should report to management
for a security breach?

A.
$1,500

B.
$3,750

C.
$15,000

D.
$75,000

Explanation:
SLE × ARO = ALE, where SLE is equal to asset value (AV) times exposure factor (EF); and ARO
is the annualized rate of occurrence.
SLE = 250 x $300; ARO = 5%
$75000 x 0.05 = $3750