You have been asked to calculate the annualized loss expecta

You have been asked to calculate the annualized loss expectancy (ALE) for the following variables:
Single loss expectancy = $25
Exposure factor = .9
Annualized rate of occurrence = .4
Residual risk = $30
Which of the following is the resulting ALE?
A. $9.00
B. $22.50
C. $10.00
D. $14.27

C. $25 × .4 = $10, or Single loss expectancy (SLE) × Annualized rate of occurrence (ARO) = Annualized loss expectancy (ALE).