Which of the following statements about lines of authority and reporting are true?

Both statements are true within the PRINCE2® framework. Statement 1 is accurate as the Project Manager does have day-to-day control within the limits set by the Project Board for a management stage. Statement 2 is also correct because if a Team Manager forecasts a deviation beyond Work Package tolerances, it should indeed be referred to the Project Manager. References: PRINCE2® Foundation official study materials.