Annualized rate of occurrence (ARO) is described as an estimated frequency of the threat occurring in one year. ARO is used to calculate ALE (annualized loss expectancy). ALE is calculated as follows: ALE = SLE x ARO. ALE is $15,000 ($30,000 x 0.5), when ARO is estimated to be 0.5 (once in two years).

How is annual loss expectancy calculated?

The annualized loss expectancy (ALE) is computed as the product of the asset value (AV) times the exposure factor (EF) times the annualized rate of occurrence (ARO). This is the longer form of the formula ALE = SLE x ARO.

How do you calculate annual loss expectancy ale in comparative business analysis CBA )?

CBA is calculated using the ALE CBA = ALE(prior) – ALE(post) – ACS ALE(prior) is the annualized loss expectancy of the risk before the implementation of the control. ALE(post) is the ALE examined after the control has been in place for a period of time.