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Annualized Loss Expectancy

(ARO) Probability of Yearly Loss (decimal):           
Annualized Rate of Occurrence -- probability that a risk will occur in a particular year
(AV) Asset Value ($):           
Asset Value -- a monetary value assigned to an asset (based on actual cost or its replacement and labor costs, or lost revenue)
(EF) Exposure Factor (% as a decimal):           
Exposure Factor -- a proportion of an asset's value that is likely to be destroyed by a particular risk
(SLE) Single Loss Expectancy ($):           
SLE = AV * EF   Single Loss Expectancy -- expected monetary loss every time a risk occurs
(ALE) Annualized Loss Expectancy ($):           
ALE = ARO * SLE   Annualized Loss Expectancy -- expected monetary loss that can be expected for an asset due to a risk over a 1-year period

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