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Governance, Risk, Audit & Privacy · Foundational

Annualized Rate of Occurrence (ARO)

Estimated number of times a specific threat event is expected to occur in one year.

Definition

ARO expresses frequency on an annual basis; an event expected once every 10 years has an ARO of 0.1, and one expected four times a year has an ARO of 4. It is derived from historical data, industry statistics, and expert judgment. ARO multiplied by SLE gives ALE.

Example

A 100-year flood has an ARO of 0.01.

Exam tip

Convert 'once every N years' to 1/N; candidates often invert this.

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