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Meeting with the traffic authority staff responsible for the new regulation allows the project manager and risk manager to understand the potential changes and their impact on the project. This will help them proactively address any potential issues and ensure the project complies with the new regulations.

According to the PMBOK Guide, 6th edition, Chapter 11: Project Risk Management1, the project manager and the risk manager should handle this situation by meeting with the traffic authority staff in charge of the new regulation. This is because:

The new traffic regulation is an external risk that could affect the project objectives, such as scope, schedule, cost, quality, and customer satisfaction. External risks are those that arise from outside the project boundaries and are beyond the control of the project team. Examples of external risks include changes in government policies, regulations, laws, market conditions, environmental factors, etc.

The project manager and the risk manager should proactively engage with the external stakeholders who have the power and influence to create or modify the external risks. By meeting with the traffic authority staff, they can establish a positive relationship, gain insights into the new regulation, and influence its development to align with the project needs. They can also obtain information on the probability and impact of the risk, as well as the potential response strategies.

The other options are not effective in handling this situation because:

Ensuring the project complies with the current traffic regulations and laws does not address the risk of the new regulation that could change the project requirements, scope, or deliverables. It also does not help the project team to prepare for the possible changes and mitigate their negative effects.

Sending a letter to the traffic authority with the general project information does not establish a direct and timely communication channel with the external stakeholder. It also does not provide enough details or feedback to understand the nature and implications of the new regulation.

Performing inquiries on the website of the traffic authority weekly does not allow the project team to influence the development of the new regulation or obtain reliable and updated information. It also does not enable the project team to build trust and rapport with the external stakeholder.

References:

PMBOK Guide, 6th edition, Chapter 11: Project Risk Management1

Risk Management Professional (PMI-RMP)® Exam Cert Guide2

TheThe project manager should include secondary and residual risks as part of the risk response plan. Secondary risks are those risks that arise as a direct result of implementing a risk response to a specific risk. Residual risks are those risks that are expected to remain after the planned responses of risks have been taken, as well as those that have been deliberately accepted. Both secondary and residual risks should be identified, analyzed, and monitored throughout the project life cycle. The project managershould communicate the risk response plan to the project sponsor and other stakeholders, and explain how the project team has planned to manage the secondary and residual risks12

References: 1: PMI Risk Management Professional (PMI-RMP)® Handbook, page 10 2: A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Seventh Edition, page 11.2.2.1

project manager should include secondary and residual risks in the risk response plan, as they may still impact the project. Proactively addressing these risks will help the project team to be prepared and manage them effectively if they occur.

The risk manager's request to include Field 2 in the scope of the current project is a clear attempt to increase the project’s profitability by expanding its scope to a more lucrative area. This type of request is aimed at increasing project earnings, as it involves altering the project’s objectives to capture a more significant financial opportunity.

According to PMI, requests that seek to modify project scope for financial gain are typically categorized as efforts to increase project earnings or revenue​​.

The expected monetary value (EMV) for this project can be calculated as follows: (0.6 x US$100,000) - (0.4 x US$100,000) = US$60,000 - US$40,000 = US$20,000 profit.

The EMV of a project is the weighted average of the possible outcomes, which are a US$100,000 profit or a US$100,000 loss in this case. To calculate the EMV, we multiply the probability of each outcome by its monetary value, and then add them together. The formula is:

EMV = (Probability of profit x Value of profit) + (Probability of loss x Value of loss)

In this case, the probability of profit is 60%, and the value of profit is US$100,000. The probability of loss is 40%, and the value of loss is -US$100,000 (negative because it is a loss). Therefore, the EMV is:

EMV = (0.6 x 100,000) + (0.4 x -100,000) EMV = 60,000 - 40,000 EMV = US$20,000

This means that the project has an expected monetary value of US$20,000 profit, which is the answer option B. The other options are incorrect because they do not match the EMV calculation.

The EMV is a useful tool for comparing different projects or alternatives based on their expected values. However, it does not account for the variability or uncertainty of the outcomes, which may also affect the project decision making. For example, a project with a higher EMV but a higher risk may not be preferable to a project with a lower EMV but a lower risk. Therefore, the EMV should be used with caution and in conjunction with other risk analysis techniques.

For more information on the EMV and other risk analysis methods, you can refer to the PMI Risk Management Professional (PMI-RMP) Examination Content Outline and Specifications, the A Guide to the Project Management Body of Knowledge (PMBOK® Guide) – Sixth Edition, and the Expected Monetary Value (EMV): A Guide With Examples. I hope this helps you understand the concept of EMV and how to apply it to project risk management