Reptiles are a paraphyletic group because?
I think the question's phrasing is arguably a little wobbly, typically as to the nature of what someone would mean by the term "reptile". But I think you understood what your teacher was expecting. I agree with you, answer is B. 

Reptilia is a clade (clade = monophyletic group) that encompasses all species that we traditionally classify as reptiles + all birds. Hence, our traditional definition of reptile makes up for a paraphyletic group as birds aren't included.

Related post: If dinosaurs could have feathers, would they still be reptiles?