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Mark is the project manager of the NHQ project in StarTech Inc. The project has an asset valued at $195,000 and is subjected to an exposure factor of 35 percent. What will be the Single Loss Expectancy of the project?
A. $68,250
B. $92,600
C. $72,650
D. $67,250
Answer: A
Explanation:
The Single Loss Expectancy (SLE) of this project will be $68,250. Single Loss Expectancy is a term related to Risk Management and Risk Assessment. It can be defined as the monetary value expected from the occurrence of a risk on an asset. It is mathematically expressed as follows: Single Loss Expectancy (SLE) = Asset Value (AV) * Exposure Factor (EF) where the Exposure Factor is represented in the impact of the risk over the asset, or percentage of asset lost. As an example, if the Asset Value is reduced two thirds, the exposure factor value is .66. If the asset is completely lost, the Exposure Factor is 1.0. The result is a monetary value in the same unit as the Single Loss Expectancy is expressed. Here, it is as follows: SLE = Asset Value * Exposure Factor = 195,000 * 0.35 = $68,250 Answer B, C, and D are incorrect. These are not valid SLE's for this project.
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