Risk Management Involves Estimating the "Expected Loss" Associated with a Particular

Essay

Risk management involves estimating the "expected loss" associated with a particular security breach. Jim Jackson is the Chief Security Officer CSO) at a global financial firm. He recently attended a cybersecurity conference where he learned about a new type of cyber-attack being used by Anonymous, a hacker group that tends to target global corporations. Based on information from various industry reports, Jim estimates the following:
Probability that Anonymous will target and attack his firm = .15
Probability that Anonymous' attack will succeed = .10
Loss that will be incurred if attack is successful = $25 million
Additional cost to defend against the attack = $300,000
Calculate the expected loss that Jim's firm faces as a result of the Anonymous threat. Show your work, including the formula you use.