Tim’s organization knows that a major breach occurs once every four years, resulting in a loss of $250,000 for his organization. What is the annual rate of occurrence that Tim should use in his risk calculations?

Annual rate of occurrence is calculated by determining how many times in a year the event happens, on average. If it happens less than once a year, the rate is a fraction based on that rate. Here the event happens once every four years, or .25 of the time during a given year.