To answer this question, let's go through the given code step by step:
The code reads data from a file using the INFILE statement and stores it in the TEMP dataset.
The INPUT statement is used to specify the variables to be read from the file. In this case, it reads the variable 'x' as a character variable and 'age' as a numeric variable.
The IF statement is used to filter the observations based on the condition 'age<=40'. It only keeps the observations where the age is less than or equal to 40.
Given the flat file structure, the observations with the following ages meet the condition:
- vital reddy (age 45) does not meet the condition
- vijay (age 30) meets the condition
- sarma (age 40) meets the condition
Therefore, there will be a total of 2 observations in the TEMP dataset that meet the condition.
So, the correct answer is B) 2 observations.