Knowing nothing about how schemas in SQL 2K, I guessed you would get a syntax error, wrongly as it turned out. But when I tried the script, it turned out that answer C. seems to be right after all, I get the error

Server: Msg 195, Level 15, State 10, Line 1
'SCHEMA_NAME' is not a recognized function name.

Is SCHEMA_NAME a SQL Server 2005 function?

David

Category : SQL Server 2005 - TSQL
Question - Worth 2 Point(s):
What will be the result of the last SELECT statement if you execute the T-SQL script below as a sysadmin.

Question category was SQL 2005. There's no such thing as schemas in SQL 2000

We walk in the dark places no others will enter
We stand on the bridge and no one may pass

There are schemas in a limited form in SQL Server 2000. Seem to be a way to create objects and grant permissions in a single logical transaction...

BOL says

"CREATE SCHEMA provides a way to create tables and views and to grant permissions for objects with a single statement. If errors occur when creating any objects or granting any permissions specified in a CREATE SCHEMA statement, none of the objects are created.

The created objects do not have to appear in logical order, except for views that reference other views. For example, a GRANT statement can grant permission for an object before the object itself is created, or a CREATE VIEW statement can appear before the CREATE TABLE statements creating the tables referenced by the view. Also, CREATE TABLE statements can declare foreign keys to tables specified later. The exception is that if the select from one view references another view, the referenced view must be specified before the view that references it."

When I tried the script in SQL Server 2000 everything worked up to the point where I tried to create the second table.

David

Using 2005, I received the following message.

SELECT SCHEMA_NAME(schema_id), name FROM sys.objects

WHERE name = 'Table1'

I selected A as the answer:

1 (A).

Schema1    Table1dbo        Table1

My coworker suggested B as the answer but I know he was wrong.
Having read and reviewed scheme, it was all good.  Then I saw 
Answer C, that almost seem right to me because I haven't encounter
sys.objects before and just last night, I got the information I want 
from sysobjects ... I was sooo leaning towards C but select B to claim my coworker down.

What do you know, my answer was right.  He was still questioning the concept so we ran the code
in sql 2005 and boom, A, was the correct answer.

The question does state the version. Look at the category

Category : SQL Server 2005 - TSQL

We walk in the dark places no others will enter
We stand on the bridge and no one may pass