Agreed. Since there is no ORDER BY, both answer options #1 and #2 are correct. I chose the first, at random, and got my point. I then ran the code to see that, on my computer, my version of SQL Server, the current service pack and hotfix level, and the current workload on the machine, this was indeed the result - but there is no guarantee at all that the same ordering of rows willl be reproduced the next time I run this code.

Not a bad question for understanding that UNION removes duplicates, and that two NULLs, even though they don't compare as equal, are considered duplicate - but a very bad question for including two versions of the same answer, in a different order, and only showing one of tem as correct.

@steve-2: Probabaly the best way to fix this is to change the question to read: "what can be the output of this code (check all that apply)", and mark both answers #1 and #2 as correct.