Unless ATC instructs otherwise, pilots operating VFR shall select transponder code 1200 when flying at or below ..... feet ASL and code ..... when flying above that altitude.
Why this is the answer
Per the transponder rules (TC AIM-COM 8.4), VFR aircraft squawk 1200 at or below 12,500 ft ASL and 1400 above it, unless ATC assigns otherwise.
Reference
TC AIM-COM – VFR Operations
Question reproduced verbatim from Transport Canada’s PSTAR Study and Reference Guide (TP 11919E). The answer key is Transport Canada’s; the explanation is ours.
A study aid — not a substitute for the official guide, the CARs, or your instructor.