Annualized Loss Expectancy is calculated as Single Loss Expectancy multiplied by Annual Rate of _____.
Answer
Occurrence
Explanation
### Why this is right
Annualized Loss Expectancy uses the expected loss from one event and how often that event is expected to occur in a year. The relationship is $ALE = SLE \\times ARO$.
### The concept
Single Loss Expectancy estimates the loss from one occurrence. Annual Rate of Occurrence estimates how often that event occurs in a year. Multiplying them gives an annualized estimate, not a guarantee of the exact loss in a particular year.
### Terms
- **Annualized Loss Expectancy (ALE)**: Expected loss per year for a specified event.
- **Single Loss Expectancy (SLE)**: Estimated loss from one occurrence.
- **Annual Rate of Occurrence (ARO)**: Estimated annual frequency of an event.
### Remember
Annual loss estimate equals loss per event times annual event frequency.
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