Sorry, but within the context of Microsoft terminology, this is simply wrong.

Within the context of SQL Server documentation, "UNKNOWN" (all uppercase) is used exclusively as a Boolean result in SQL Server's 3-valued "Boolean" logic:

http://msdn.microsoft.com/en-us/library/ms188074.aspx

And no, the "UNKNOWN" boolean result is NOT the same as "NULL" (even though with ANSI_NULLS on, any comparison with NULL will yield an "UNKNOWN" Boolean result).

In terms of natural language it is reasonable to say that "Null means unknown", but Microsoft's own explanation is "The presence NULL usually implies that the value is either unknown or undefined", which is a much more carefully qualified statement - implying that the only correct answer from the options given is "Null means Null"...

I'm sorry, but I don't even understand what the author intended/tried to demonstrate or test for with this question - maybe that a definition should not include the term being defined??? If so it would be worth mentioning that in the explanation!

(EDIT: changed "boolean" to "Boolean" to better reflect that I am talking about SQL Server's data type rather than a true "boolean" logic, which would by definition only have two possible values)