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E05 Practice Test Fee, E05 Exam Objectives | E05 Latest Torrent - Atk-Kazatk

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Examination element of M05 Insurance law
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272 Questions and Answers
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NEW QUESTION: 1
An accountant at a small business is trying to understand the value of a server to determine if the business can afford to buy another server for DR. The risk manager only provided the accountant with the SLE of $24,000, ARO of 20% and the exposure factor of 25%. Which of the following is the correct asset value calculated by the accountant?
A. $24,000
B. $96,000
C. $4,800
D. $120,000
Answer: B
Explanation:
The annualized loss expectancy (ALE) is the product of the annual rate of occurrence (ARO) and the single loss expectancy (SLE). It is mathematically expressed as: ALE = ARO x SLE
Single Loss Expectancy (SLE) is mathematically expressed as: Asset value (AV) x Exposure Factor (EF)
Thus if SLE = $ 24,000 and EF = 25% then the Asset value is SLE/EF = $ 96,000
References:
http://www.financeformulas.net/Return_on_Investment.html
https://en.wikipedia.org/wiki/Risk_assessment


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