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Can someone please help me in understanding below question as well as how to figure out keywords ?
A local government provides subsidies for energy-efficient activities. An Organization plans a project to install solar panels to reduce energy costs. After the solar panel project has started, the government announces that solar panels may not continue to qualify for subsidies.   What should the project manager do?

 a) Create a change request.

 b) Update the issue log.

 c) Use the contingency reserve.

 d) Raise the risk level.

According to me I think its option A.Reasoning -As per the question government announce the change in law and project has already started.So the project manager should create change request to accommodate the changes because of this new law.
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This is a fairly poorly written question, Aditi, and is one of the reasons that folks should only prepare for the PMP exam (assuming that is why you are asking about it) using reputable, quality practice exams.

Because the question states that the solar panels "may" not continue to qualify, this is either a new risk or a change to an existing risk. As such, the PM and team should identify and analyze the risk and recommend a suitable risk response.

If the question was intended to state that the solar panels would not qualify for subsidies, we are now dealing with a change (as opposed to a risk) to the potential benefits or ROI on the project.

In either event, I'm not happy with the answers provided...

Kiron
Thanks Kiron for the reply.This question was posted in "Question of the day" section of this site.
According to me, the correct answer is "D".

The key words here are "that solar panels may not continue to qualify for subsidies". This is a risk and now that the govt. announced it, the PM should increase the risk level (part of impact & probability assessment).
I'm going to muddy the waters even more. When you first find out about the subsidy revocation, you have an issue. The issue is because you had an assumption (low risk?) that the subsidy program would still be in place.

How will you resolve the issue? As Kiron pointed out, it depends on whether "may" means it could happen or will happen. If it is not a given, then you solve the issue by creating a risk with ensuing mitigation and contingency plans. If it is a given, then the issue forces you into a change request, where you will assess the impact and change actions. (The change actions should look like your contingency plan, if it was a risk.)
Would go with D to, as the question includes 'may'.

On another thought, most projects are not in charge of the ROI of their product. The business owner is mostly the sponsor, so the change in funding by the government would affect the sponsor, not the project. I this case, B, issue log is the best answer.
Out of all the options I would choose D, because its a "may" so its a risk, not an issue until it actually occurs.
Giving the fact that the government might not qualify you for the incentive program, this impacts the project cost, objective and possibly the schedule, therefore this should be raised as a new risk

I also agree with the first comment by Kiron, the question could have been stated better
I see, Rami, you take the approach that a realized risk becomes an issue. I beileve that an issue is a realized risk for which you have no contingency plan (usually because the risk was not in your register.) In other words, if I had the lapsing of the subsidy in my risk register and I had planned exactly what I had to do if it happened, then it would not be an issue.
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2 replies by Keith Novak and Rami Kaibni
May 19, 2020 5:32 PM
Keith Novak
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An issue is any risk where the probability is 100%. You can have a plan, but it's still a certain impact.
May 19, 2020 7:36 PM
Rami Kaibni
...
Stephane: I agree with Keith and even if the risk is on the risk register and it occurs, it becomes an issue as the probability change to 100%.
May 19, 2020 4:45 PM
Replying to Stéphane Parent
...
I see, Rami, you take the approach that a realized risk becomes an issue. I beileve that an issue is a realized risk for which you have no contingency plan (usually because the risk was not in your register.) In other words, if I had the lapsing of the subsidy in my risk register and I had planned exactly what I had to do if it happened, then it would not be an issue.
An issue is any risk where the probability is 100%. You can have a plan, but it's still a certain impact.
May 19, 2020 4:45 PM
Replying to Stéphane Parent
...
I see, Rami, you take the approach that a realized risk becomes an issue. I beileve that an issue is a realized risk for which you have no contingency plan (usually because the risk was not in your register.) In other words, if I had the lapsing of the subsidy in my risk register and I had planned exactly what I had to do if it happened, then it would not be an issue.
Stephane: I agree with Keith and even if the risk is on the risk register and it occurs, it becomes an issue as the probability change to 100%.
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