If TAP is coded as SZO, then how is FREEZE coded ?

Answer: D. EQDDYD

Clearly, each letter in the TAP is moved one step backward to obtain the corresponding letter of the code.
(S ← T), (Z ← A) and (O ← P)
Thus, in FREEZE, F will be coded as E, (R as Q), (E as D), (Z as Y).
So, the code become EQDDYD.
Hence, the answer is (d).