what submatrix means is a subset formed by taking a block of size mxn (in your example 2x2) from the original matrix. so the 2x2 submatrix of C that is the upper left means it would be the upper left corner 2x2 [1 2;4 5].
So the question is probably asking you to define a new submatrix C2 by the means of array indexing (is that the right word?) instead of hard coding it in. you can read up on it here http://www.mathworks.com/help/matlab/math/matrix-indexing.html. So eventually it would look like:
C2=C(_somethinghere_).
