Explanation/Reference:
Single Loss Expectancy (SLE) is the dollar amount that would be lost if there was a loss of an asset.
Annualized Rate of Occurrence (ARO) is an estimated possibility of a threat to an asset taking place in one year (for example if there is a change of a flood occuring once in 10 years the ARO would be .1, and if there was a chance of a flood occuring once in 100 years then the ARO would be .01).
The following answers are incorrect:
gross loss expectancy x loss frequency. Is incorrect because this is a distractor.
actual replacement cost - proceeds of salvage. Is incorrect because this is a distractor.
asset value x loss expectancy. Is incorrect because this is a distractor.

Explanation/Reference:
A fault-tolerant system is capable of detecting that a fault has occurred and has the ability to correct the fault or operate around it. In a fail-safe system, program execution is terminated, and the system is protected from being compromised when a hardware or software failure occurs and is detected. In a fail- soft system, when a hardware or software failure occurs and is detected, selected, non-critical processing is terminated. The term failover refers to switching to a duplicate "hot" backup component in real-time when a hardware or software failure occurs, enabling processing to continue.
Source: KRUTZ, Ronald L. & VINES, Russel D., The CISSP Prep Guide: Mastering the Ten Domains of Computer Security, John Wiley & Sons, 2001, Chapter 5: Security Architecture and Models (page 196).

Explanation/Reference:
Project Initiation and Management
This is the first step in building the Business Continuity program is project initiation and management.
During this phase, the following activities will occur:
Obtain senior management support to go forward with the project
Define a project scope, the objectives to be achieved, and the planning assumptions Estimate the project resources needed to be successful, both human resources and financial resources Define a timeline and major deliverables of the project In this phase, the program will be managed like a project, and a project manager should be assigned to the BC and DR domain.
The next step in the planning process is to have the planning team perform a BIA. The BIA will help the company decide what needs to be recovered, and how quickly. Mission functions are typically designated with terms such as critical, essential, supporting and nonessential to help determine the appropriate prioritization.
One of the first steps of a BIA is to Identify and Prioritize Critical Organization Functions. All organizational functions and the technology that supports them need to be classified based on their recovery priority.
Recovery time frames for organization operations are driven by the consequences of not performing the function. The consequences may be the result of organization lost during the down period; contractual commitments not met resulting in fines or lawsuits, lost goodwill with customers.
All other answers are incorrect.
Reference(s) used for this question:
Hernandez CISSP, Steven (2012-12-21). Official (ISC)2 Guide to the CISSP CBK, Third Edition ((ISC)2 Press) (Kindle Locations 21073-21075). Auerbach Publications. Kindle Edition.
Hernandez CISSP, Steven (2012-12-21). Official (ISC)2 Guide to the CISSP CBK, Third Edition ((ISC)2 Press) (Kindle Locations 20697-20710). Auerbach Publications. Kindle Edition.

Section: Cryptography
Explanation/Reference:
The Internet Security Glossary (RFC2828) defines an attribute certificate as a digital certificate that binds a set of descriptive data items, other than a public key, either directly to a subject name or to the identifier of another certificate that is a public-key certificate. A public-key certificate binds a subject name to a public key value, along with information needed to perform certain cryptographic functions. Other attributes of a subject, such as a security clearance, may be certified in a separate kind of digital certificate, called an attribute certificate. A subject may have multiple attribute certificates associated with its name or with each of its public-key certificates.
Source: SHIREY, Robert W., RFC2828: Internet Security Glossary, may 2000.