Quantitative Risk Assessment Flashcards
7 cards from real CCP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Quantitative Risk Assessment flashcards as text
An organization calculates that a server failure has a 15% chance of occurring each year and would cost $200,000 to recover. What is the Annual Loss Expectancy (ALE)?
Answer: $30,000
ALE = ARO × SLE = 0.15 × $200,000 = $30,000.
Which metric represents the percentage of an asset's value that would be lost in a single security incident?
Answer: Exposure Factor (EF)
Exposure Factor (EF) is the percentage of asset value lost per incident, used to calculate SLE.
A risk analyst wants to determine the net benefit of implementing a $50,000 security control that reduces ALE from $120,000 to $40,000. What is the value of the control?
Answer: $30,000
Value = (ALE before - ALE after) - cost of control = ($120,000 - $40,000) - $50,000 = $30,000.
In a Monte Carlo simulation for cyber risk, what does running thousands of iterations primarily help quantify?
Answer: The probability distribution of potential losses
Monte Carlo simulations model uncertainty by running many iterations to produce a probability distribution of outcomes.
An asset valued at $500,000 has an exposure factor of 40%. What is the Single Loss Expectancy (SLE)?
Answer: $200,000
SLE = Asset Value × EF = $500,000 × 0.40 = $200,000.
What does a confidence interval of 95% mean in the context of a quantitative cyber risk assessment?
Answer: There is a 95% chance the actual loss will fall within the stated range
A 95% confidence interval means there is a 95% probability the true loss value lies within the calculated range.
Which quantitative risk formula correctly expresses Return on Security Investment (ROSI)?
Answer: ROSI = (ALE Before - ALE After - Control Cost) / Control Cost
ROSI measures the net risk reduction relative to control cost: (ALE reduction - control cost) / control cost.