Hi All --

I believe this question is incorrect:

Jackie is the project manager of large project. During the Determine Budget phase, she identifies that contingency reserves need to be made for unplanned but potentially required changes that could result from realized risks identified in the risk register. Which of the following is true about reserves?

1. Reserves are not a part of project cost baseline, but may be included in the total budget for the project

2. Reserves are not a part of project cost baseline, and will not be included in the total budget for the project

3. Reserves are a part of project cost baseline, but will not be included in the total budget for the project

4. Reserves are a part of project cost baseline, and will be included in the total budget for the project

According to the answer key the answer is A, but I believe that answer is D as Contingency reserve is part of the cost baseline while management resource is not. 

Here is the answer key's reasoning for the answer being A:

A - Reserves are not a part of project cost baseline, but may be included in the total budget for the project. A project manager may require approval before spending reserves. [Refer PMBOK 4th Edition, page 177] [Project Cost Management]

If anyone can offer help it will be appreciated.

Thanks!