I don't understand the question?

The answer provided to the problem does NOT match the explanation.
The function should return a new dictionary where each key is the first letter of a last name, and the value is the number of people whose last name begins with that letter.

If this is the dictionary in the example:
names = {“Stark”: [“Ned”, “Robb”, “Sansa”], “Snow” : [“Jon”], “Lannister”: [“Jaime”, “Cersei”, “Tywin”]}
So in example above, the function would return: {“S” : 4, “L”: 3}

How can this be the correct answer? There are ONLY two last names that begin with “S” and one that begins with “L” Where do they get 4 & 3 from ???

This explanationis very vague and misleading.
“The function should return a new dictionary where each key is the first letter of a last name, and the value is the number of people whose last name begins with that letter.”
More accurately it should state, “…and the value is the number of first names that share same letter…”

There are two families with a last name beginning with S, four members in all. Likewise there are two members in the Lannister family.