What does ARO stand for in risk management?

What does ARO stand for in risk management?

• A. Annual Rate of Occurrence
• B. Annual Rate Of Occurrence
• C. Annual Occurrence Rate
• D. Annual Rate of Occurrence

Answer: (B)

ARO stands for Annual Rate Of Occurrence. It describes how often a given threat event is expected to occur within a year, reflecting its frequency rather than a single-event probability. In risk management, this value is used with the Single Loss Expectancy to calculate the Annual Loss Expectancy: ALE = SLE × ARO. For example, if the cost of a single breach (SLE) is $50,000 and you expect it to occur twice a year (ARO = 2), the ALE would be $100,000 per year. The capitalization in the choices is a matter of style; the essential idea is the yearly frequency of the event.

ARO stands for Annual Rate Of Occurrence. It describes how often a given threat event is expected to occur within a year, reflecting its frequency rather than a single-event probability. In risk management, this value is used with the Single Loss Expectancy to calculate the Annual Loss Expectancy: ALE = SLE × ARO. For example, if the cost of a single breach (SLE) is $50,000 and you expect it to occur twice a year (ARO = 2), the ALE would be $100,000 per year. The capitalization in the choices is a matter of style; the essential idea is the yearly frequency of the event.