Just took the test and it is B. enter names, addresses, and other information into the New Address List table.
Got it form Penn Foster:
Step 2: Select Recipients
The recipients list will be used by Word to personalize each document. Therefore, you’ll need to be prepared to enter names, addresses, and other information for your document when you start this step of mail merge. Click Select Recipients on the Mailings tab and then click Type a New List. A New Address List dialog box is displayed where you type the information for each recipient. To create an email merge document select Choose from Outlook Contacts.