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Management Of Information Security

6th Edition
WHITMAN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337405713

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Section
BuyFindarrow_forward

Management Of Information Security

6th Edition
WHITMAN + 1 other
Publisher: Cengage Learning,
ISBN: 9781337405713
Chapter 7, Problem 3E
Textbook Problem
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How could we determine EF if there is no percentage given? Which method is easier for determining the SLE: a percentage of value lost or cost per incident?

Program Plan Intro

Single loss expectancy:

  • The expected monetary loss every time a risk occurs is called the Single Loss Expectancy.
  • The Single Loss Expectancy (SLE), Exposure Factor (EF) and Asset Value (AV) are related by the formula:
    • SLE = EF * AV
  • Introducing this conceptual breakdown of Single Loss Expectancy into Exposure Factor and Asset Value allows us to adjust the two terms independently and is related to risk management and risk assessment.
  • Asset Value may vary with market changes, inflation while Exposure Factor can be reduced by enabling preventive measures.

Annualized loss expectancy:

  • The product of the single loss expectancy (SLE) and the annual rate of occurrence (ARO) give annualized loss expectancy (ALE).
  • It is mathematically expressed as:
    • ALE = SLE * ARO
  • The important feature of Annualized Loss Expectancy is that it can be used directly in a cost- benefit analysis.

Explanation of Solution

Determination of Exposure factor (EF):

  • The exposure factor denotes a loss percentage for a specific asset if a threat is recognized.
  • It denotes a personal value that person measuring risk need to define.
  • It is represented as impact of risk over asset or asset percentage lost.
  • To determine EF when percentage is not given, asset value is to be compared.
  • The asset value that is to be lost is to be computed.
  • Based on asset value lost, exposure factor could be computed.
  • If asset is been entirely lost, exposure factor will be 1...

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