I think I may be sharing cron's confusion here now.
If I'm standing atop a pinnacle at 12000 feet holding an altimeter set to current QNH (1030, in this case) in ISA conditions, the altimeter will read 12000 feet.
If the temperature now rises by 10 degrees, the air is hotter, therefore less dense, therefore thinner, therefore exerts less pressure, so the altimeter reading will surely rise ? The question asks what the altimeter would read at a height of 12000ft, not what altitude would you be at if the altimeter reads 12000ft.