Interesting question!

I would have expected the ALTER VIEW to fail because of the presence of an index - if you had included that as an answer option, I would have picked the wrong answer.

Now I picked the right answer, but for the wrong reason (I thought the last CREATE INDEX would fail because of the duplicate index name).

Since I was unaware of the effect of ALTER VIEW on an indexed view, I decided to check if it's documented. Turns out it is, in the ALTER VIEW section of Books Online:

"ALTER VIEW can be applied to indexed views; however, ALTER VIEW unconditionally drops all indexes on the view."