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This is wrong. I think the correct answer is B. off-specification according to the definitions in the Prince2 manual.
off-specification (matches the question)
Something that should be provided by the project, but currently is not (or is forecast not to be). It might be a missing product or a product not meeting its specifications. It is one type of issue.
request for change
A proposal for a change to a baseline. It is a type of issue.
problem
A type of issue (other than a request for change or off-specification) that the project manager needs to resolve or escalate. Also known as a concern.
A.8.2
Off-specifications Listing any missing products or products that
do not meet the original requirements, and confirmation of any
concessions granted
Definitively the answer is B.
Reference: Off-Specification is something that should be provided by the project,
but currently is not (or is forecast not to be). It might be a missing product or a product not meeting its specifications.
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