Scenario 1: Richman Investments provides high-end smartphones to 250 of their 3000 employees. The value of each smartphone is $1
100. In the past six months, Richman has determined that in the past six months, they have had data intercepted from these phones 35 times. Consequently, they have determined that their exposure factor (EF) is 35/250 or 14%. Annual rate of occurrence (ARO): Number of times an incident is expected to occur in a year
Annual loss expectancy (ALE): Expected loss for a year
SLE = Asset Value x EF (as a percentage – for example, EF = 15% means multiply the asset value x 0.15)
ALE = SLE X ARO
The correct answer among the choices given is the third option. Speculation would mean to an economist as making high-risk investments with borrowed money. It is the purchase of something hoping for it to be more valuable at a certain time.
