An organization determines that the probability of unauthorized access to a data

Question

An organization determines that the probability of unauthorized access to a database that contains personally identifiable information (PII) about its clients and employees is 5% in a year. The total estimate of the loss due to this exposure is estimated to be 5 million dollars. This includes losses resulting from loss of reputation, business operations, fines imposed by FCC, legal fees. After consulting with a security firm, a product was identified that could implement stronger access control and that could allow security administrator to track such an unauthorized access. The total cost of the product is $500,000, plus $10,000/year for maintenance. The product should work well for next five years. It is estimated that, if implemented, it will protect from 90% of all such attacks. We want to know whether the organization should purchase this product.

1.) What is the Single Loss Expectancy (SLE)? $[SLE] (Please enter digits only)

2.) What is the Annualized Rate of Occurrence (ARO)? [ARO] %

3.)What is the calculated Annualized Loss Expectancy (ALE)? $[ALE] (Please enter digits only)

4.)What would be the ARO if the countermeasure is implemented? [nARO] %

5.)What would be the corresponding ALE? $ [nALE] (Please enter digits only)

6.)What is the countermeasure cost for a year? $ [cost] (Please enter digits only)

7.)Should the organization purchase this product? [final] (Please enter Yes or No)

Explanation / Answer

1. SLE =AV*EF
=(510000*5)/100
=25500

2a. Total Loss due to this exposure
= 5M USD=
50,00,000
2.b. Rate of Occurrence (RO in 5 years)
=50,00,000/25500
=196.5
2.c. Annualized Rate of Occurrence
=((197/5)/197)*100
=20% or 40

3. Annualized Loss Expectancy (ALE)
=SLE*ARO= (25500)=25,000*40=
10,00.000

4. After counter measures 90% will not happen so
(197*10)/100
=20
ARO after counter measure
= 20/5=4 or (4/20)*100= 20%

5. ALE after counter measures
= 25500*4= 1,02,000

6. Cost of counter measure is 5,00,000*(5*10,000)
=5,50,000 USD for five years.

7. Yes, The organization should buy this product as loss is reduced.

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