In the quantitative risk method, what is the risk likelihood called?

In the quantitative risk method, what is the risk likelihood called?

• A. Likelihood
• B. Calculated Score
• C. Annualized Rate of Occurrence (ARO)
• D. Single Loss Expectancy (SLE)

Answer: (C)

In quantitative risk analysis, the likelihood of a loss event per year is called the Annualized Rate of Occurrence. It measures how often the event is expected to happen in a year and is used alongside the monetary impact of a single incident (Single Loss Expectancy) to determine the annualized loss (ALE). The term “likelihood” on its own is too generic, and Single Loss Expectancy describes the impact, not the frequency. The other options don’t fit because they don’t represent the frequency of events per year.

In quantitative risk analysis, the likelihood of a loss event per year is called the Annualized Rate of Occurrence. It measures how often the event is expected to happen in a year and is used alongside the monetary impact of a single incident (Single Loss Expectancy) to determine the annualized loss (ALE). The term “likelihood” on its own is too generic, and Single Loss Expectancy describes the impact, not the frequency. The other options don’t fit because they don’t represent the frequency of events per year.