Chapter 5 Problems Consider the following scenario: The asset value of your comp

Question

Chapter 5 Problems Consider the following scenario: The asset value of your company's primary servers is $2 milliion, and they are housed in a single office building in Anderson, Indiana. Field offices are scattered throughout the U.S., but the workstations located at the field offices serve as thin clients and access data from the Anderson servers. Tornados in this part of the country are not uncommon, and it is estimated that one will level the building every 60 years. Answer the following questions. (clearly show your work) 1. What is the SLE for this scenario? 2. What is the ALE for this scenario? 3. What is the ARO for this scenario? 4. If you calculate the SLE to be $4,000 and that there will be 10 occurrences a year, determine the ARO and ALE 5. If you calculate the SLE to be $25,000 and that there will be 1 occurrence every four years, determine the ARO and ALE.

Explanation / Answer

(1) Since the risk is of complete neutralization of the building by tornado, then we can assume exposure factor to be 1. Hence, SLE= EFxAV where, EF=1 and AV= asset value = $2000000. Therefore, SLE= 2000000x1= $2 million. (2) ALE= AROxSLE. In this case, ARO=1/60 and SLE=$2million. Hence, ALE= $33,333.34 (3) ARO= 1/60 (4) ARO=10; ALE= 10x4000= $40,000 (5) ARO=1/4=0.25; ALE= 0.25x25000= $6250.

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