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The correct answer is C.

OBJ-3.7.3: An exception is a situation where it can be forecast that there will be a deviation beyond the tolerance levels agreed between the project manager and the project board (or between the project board and corporate, program management, or the customer). An exception report is produced when a stage plan or project plan is forecast to exceed tolerance levels set. It is prepared by the project manager in order to inform the project board of the situation and to offer options and recommendations for the way to proceed.

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