What is the formula used to calculate Single Loss Expectancy?

Single Loss Expectancy (SLE) is a critical concept in risk management and asset valuation within the realm of information security. It quantifies the expected monetary loss that could be incurred from a single event affecting a specific asset.

The correct formulation of SLE is derived from multiplying the asset's value by the exposure factor, which represents the percentage of loss that the asset would suffer if an incident were to occur. Therefore, the formula is:

Single Loss Expectancy = Asset Value * Exposure Factor

This means that if an organization has an asset valued at a certain amount, and there is a risk that a particular threat could cause a specified percentage of loss, multiplying these two figures provides a direct estimate of the financial impact that loss event would have on the organization.

Understanding this formula aids organizations in prioritizing their security efforts based on the potential economic impact of risks, ensuring that resources are effectively allocated to mitigate the most significant threats to their assets.