Interesting: After I decided on my answer of the first insert running ok, and the second insert failing, I fired up my trusty copy of SQL Server Express 2012 and ran your question in my test area to verify it. This resulted in BOTH inserts failing. So, trusting software over wetware, I selected the answer of having both fail. Oh well!
You probably executed thee two statements as a single batch. Since the error you get is raised at compile time and SQL Server always compiles the entire batch before starting execution, the ffect would be that none of the statements run. However, you get only a single error message, refering to a single statement. So the answer option "both statements will throw an error" is definitely not correct.
When I answered this question (yesterday), I knew that neither statement would execute when sent as a single batch, but since there was no answer option that described this behaviour, I knew the author intended the statements to be executed independently. (If the answer option had been phrased as "neither statement will execute successfully", I would indeed have been confused, and forced to make a 50/50 guess as to the author's intentions).