Before the SomeActivity action is executed, the value of "Counter" is not specified in the given diagram fragment; therefore, we cannot assume that it has a value. This leads to the answer C, "It is empty." In UML, unless an initial value is explicitly specified for a variable, it cannot be assumed to have a default value.
References:
* UML 2.5 Specification: The UML specification's section on variables and actions would explain that unless initialized, variables do not have a default value.