In classic risk assessment, indicator failure factor represents the impact on which score?

• A. Inherent ALE
• B. Calculated ALE
• C. Residual ALE
• D. Inherent SLE

Answer: (D)

The indicator failure factor is a multiplier of the loss severity in a risk scenario. In classic risk assessment, the single loss expectancy (SLE) represents the monetary impact of one incident. The indicator failure factor adjusts how severe that impact would be if the incident occurs, so it directly modifies the inherent SLE. Since the annualized loss expectancy (ALE) is calculated as ALE = ARO × SLE, this factor will also influence ALE indirectly, but the immediate score it changes is the per-incident impact, i.e., the inherent SLE. It isn't about how often the incident happens (frequency) or the post-control residual values, which is why the inherent SLE is the best fit.