What does Single Loss Expectancy (SLE) quantify in risk assessment?

What does Single Loss Expectancy (SLE) quantify in risk assessment?

• A. The probability of a loss
• B. The recovery time after a loss
• C. The financial impact of a single occurrence
• D. Annualized loss expectancy

Answer: (C)

Single Loss Expectancy measures the monetary damage you would incur from one incident affecting an asset. It answers “how much money is lost if a single event occurs?” by looking at what portion of the asset is lost in that event. It’s typically calculated as Asset Value multiplied by the Exposure Factor (the fraction of the asset that’s lost in a single occurrence). For example, an asset valued at $50,000 that could lose 60% in one incident would have an SLE of $30,000. This concept is about loss severity per event, not how likely the event is or how long recovery takes. Probability of occurrence and recovery time relate to different metrics, while the yearly expected loss is obtained by multiplying SLE by the rate at which such events occur (the ARO) to get ALE.

Single Loss Expectancy measures the monetary damage you would incur from one incident affecting an asset. It answers “how much money is lost if a single event occurs?” by looking at what portion of the asset is lost in that event. It’s typically calculated as Asset Value multiplied by the Exposure Factor (the fraction of the asset that’s lost in a single occurrence). For example, an asset valued at $50,000 that could lose 60% in one incident would have an SLE of $30,000. This concept is about loss severity per event, not how likely the event is or how long recovery takes. Probability of occurrence and recovery time relate to different metrics, while the yearly expected loss is obtained by multiplying SLE by the rate at which such events occur (the ARO) to get ALE.