Nishith,
Let's first of all remind ourselves that "The PMBOK Guide is always right" when it comes to answering PMP exam questions.
Now let's take a look at the available answers in order of "incorrectness"":
A.) The Project Manager.
>> Definitely not because you cannot sign your own charter. You can create it for the person who writes it but you cannot sign it yourself.
D.) The most senior project team member.
>> Same thing. People working on the project cannot sign the charter.
C.) The CEO.
>> Possible. The CEO definitely has the authority to sign it.
B.) A project initiator external to the project organization.
>> This is the BEST answer of the 4 because it follows most closely the PMBOK Guide definition. It's not 100% copied from the PMBOK Guide, but it still at the top.
You could now begin an argument that can last for days whether C or B is more correct. But strictly from the PMI/PMBOK guide perspective, the answer B is the BEST answer. It is definitely not the only correct answer you could select. It is also possible that your personal experience gives you a different view. But from a PMBOK Guide perspective, you have to realize that B is best event though the words don't match the PMBOK Guide perfectly.
You may also want to read an article that I wrote on exactly this topic on my blog a few weeks ago:
www.cornelius-fichtner.com/index.php?opt...tid=38:pmp&Itemid=60
Until Next Time,
Cornelius Fichtner, PMP, CSM
President, OSP International LLC