Practice CISSP Exam Question #030
You are concerned about the risk that a hurricane poses to your corporate headquarters in South Florida. The building itself is valued at $15 million. After consulting with the National Weather Service, you determine that there is a 10 percent likelihood that a hurricane will strike over the course of a year. You hired a team of architects and engineers who determined that the average hurricane would destroy approximately 50 percent of the building. What is the annualized loss expectancy (ALE)?
- $1.5 million
- $7.5 million
- $15 million
Answer: [$750,000] This problem requires you to compute the ALE, which is the product of the SLE and ARO. From the scenario, you know that the ARO is 0.10 (or 10 percent). From the scenario presented, you know that the SLE is $7.5 million. This yields an SLE of $750,000.
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