Your network contains an Active Directory domain named contoso.com. The domain contains a file server
named Server1. Server1 is a BranchCache hosted cache server that is located in a branch office.
The network contains client computers that run either Windows 7 or Windows 8.
For the branch office, all of the user accounts and the client computer accounts are located in an organizational
unit (OU) named Branch1. A Group Policy object (GPO) named GPO1 is linked to Branch 1. GPO1 contains
the BranchCache settings.
You discover that users in the branch office who have client computers that run Windows 7 do not access
cached content from Server1. Users in the branch office who have Windows 8 computers access cached
content from Server1.
You need to configure the Windows 7 computers to use BranchCache on Server1. Which setting should you
configure in GPO1?
To answer, select the appropriate setting in the answer area.
Point and Shoot:
Answer: 
Explanation:
Hosted Cache mode
In hosted cache mode, cached content is maintained on a computer running Windows Server 2008 R2 on the
branch office network.
http://technet.microsoft.com/en-us/library/dd637820(v=ws.10).aspx
I would think the “Configure Client BranchCache Version Support” would be more appropriate. The scenario appears to have Windows 8 clients working in Hosted Cache Mode already. The Windows 7 machines can only do branchcache version 1. The content on the Server1 must be pulled for both version 1 and version 2. The disabled GPO setting prevents multi-version support for the cached content.
https://www.windows-security.org/802656970565700a06138cfa319b6659/configure-client-branchcache-version-support
Agreed. The answer should be: “Configure Client BranchCache Version Support – ‘Windows Vista with BITS 4.0 installed, Windows 7, or Windows Server 2008 R2’ “
From the link:
“If client computers do not use the same BranchCache version cache efficiency might be reduced because client computers that are using different versions of BranchCache might store cache data in incompatible formats.”
This setting is to provide compatibility between different OS versions. The answer is correct.
Windows 7 does not support multiple BranchCache servers. The option “Configure Hosted Cache Servers” doesn’t work because Windows 7 doesn’t process this policy, which allows for more than one server to be set. Only the “Set BranchCache Hosted Cache Mode” is processed, which allows for only one server to be set as Branch Cache Server. Answer is correct.
I am still confused, what is the correct answer?
Set BranchCache Hosted Cache Mode or
Configure Client BranchCache Version Support?
Thanks
BranchCache Version Support is supported only on Windows 8+ so the correct answer is Set BranchCache Hosted Cache Mode.