ALE
Annualized Loss Expectancy
The expected yearly cost of a risk, calculated as SLE multiplied by ARO.
ALE is the expected yearly monetary loss from a specific risk, computed by multiplying single loss expectancy by the annualized rate of occurrence. It translates uncertain threats into a dollar figure that supports cost-benefit decisions, for example comparing ALE before and after a control to judge whether the safeguard is worth its price. A frequent exam task is the formula chain: SLE equals asset value times exposure factor, then ALE equals SLE times ARO, so mixing up these inputs produces wrong quantitative answers.
Annual Loss Expectancy = SLE x ARO. The yearly cost of a risk.
Looking ALE up is step one. Getting tested on it is step two.
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