I think it would be useful to have a look at the definitions of categorical data and discrete data that are provided in your textbook:
- Categorical data are usually words and can be grouped into categories, such as a person's hair colour or cultural background.
- Discrete data are counted or measured and can only take on separate, distinct values, with 'gaps' or 'jumps', for example, the number of girls in a family is discrete because it could be 0, 1, 2, etc, but never 2.3 or View attachment 36105.
Example 11a in the textbook is similar to this question, whereby report grades (for example, A, B, C) are similar to the scale of 1 to 5 stars in the sense that both an A grade and a 5-star rating can be treated as a category, such as "excellent". This would also explain the reason that the answer is B, i.e. this is about categories rather than counting/measuring.
I hope this helps!