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 than 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.