# Quantitative Risk Assessment Backlink: [[Domain 1 - Index]] **Definition:** Numeric estimation of loss using financial values and frequencies to support cost–benefit decisions. ## Key Facts - **Formula:** SLE = Asset Value × Exposure Factor; ALE = SLE × ARO. - Requires credible data (historical, actuarial, intel). - Enables ROI/Cost–benefit for controls and insurance sizing. - Monte Carlo/sensitivity analysis improve realism. - Integrate with budgeting; validate assumptions. - **Verify:** check official (ISC)² CBK and current exam outline. >[!tip] **Exam Relevance** - Compute SLE/ALE; compare control costs vs. ALE reduction - Interpret ARO/EF parameters in scenarios >[!note] **Mnemonic** - “SLE then ALE → Single then Annual.” ### Example Q: Asset £100k, EF 30%, ARO 0.5. ALE? A: SLE = £30k; ALE = £15k. ## Revision Checklist - [ ] Memorize equations - [ ] Practice quick calculations - [ ] Note data quality needs - [ ] Tie to control ROI decisions ## Related [[Risk Terminology]] · [[Qualitative Risk Assessment]] · [[Risk Response Strategies]] · [[Security Metrics, KPIs, and KRIs]] · [[Asset Valuation]] #cisSP #domain-1 #concept