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. (January 2021)
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:
Suppose that an asset is valued at $100,000, and the Exposure Factor (EF) for this asset is 25%. The single loss expectancy (SLE) then, is 25% * $100,000, or $25,000.
The annualized loss expectancy is the product of the annual rate of occurrence (ARO) and the single loss expectancy.
ALE = ARO * SLE
For an annual rate of occurrence of 1, the annualized loss expectancy is 1 * $25,000, or $25,000.
For an ARO of 3, the equation is:
ALE = 3 * $25,000. Therefore:
ALE = $75,000