The answer to this problem is "OPTION C" i.e. The pieces will repel because the cut end of the top magnet is a south pole.
A magnet as a collection of tiny magnets, called magnetic domains. Each of these domain reinforces the magnetic fields of the other domains and hence the net magnetic field of magnet is generated. Each one of these domains have a tiny north and south pole. If you cut a magnet in half (along the line suggested in the problem), the newly cut faces will become the new north or south poles of the divided parts.