If I jump up and down, my momentum is not conserved, but that of the system me+planet is. In this problem, the rod+ball system must have its angular momentum conserved, no matter which inertial frame of reference you choose to measure it in. That's because the only external forces (gravity, normal force from table) cancel.
If the answer is not A, then I guess they just meant the ang mom of the rod (but it's awful they don't make this clear).
In general, a force applied at some point, P, is completely equivalent to a parallel force of the same magnitude applied at some other point, Q, plus an appropriate torque. The torque is the vector product of the original force and the vector P-Q. So if the ball strikes the rod away from the rod's mass centre, we can equate the impulse to an impulse at the mass centre plus an impulsive torque.
Clearly an impulse at the rod's mass centre will not change its angular momentum, but an impulsive torque (which is an amount of angular momentum) will changes its ang mom by that amount.