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Solaris 8 Security by Edgar Danielyan

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Calculating Risk

One of the best and simplest ways to quantify risk is the following simple formula proposed by Dr. Peter Tippett:

Threat × Vulnerability × Cost = Risk

Here, threat is the average frequency of a particular problem, expressed as a percentage. Vulnerability is your organization’s level of preparedness for the specified Threat (ranging from 0 to 1, where 0 means that no vulnerability exists and 1 means no defense against the vulnerability at all). Cost is the sum of all immediate and future losses in case of a security breach, expressed in dollars. This should include immediate loss of revenue, loss of customers, possible legal costs, and loss of customer confidence. The resulting numerical value is the risk. It is important to ...

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