Well I'm an instructor

and could have asked this question myself.
The correct answer will properly be:
If your implement a statemachine in a CPLD will the combinatorial logic compared with the number of F/Fs mean that binary and gray style gives the best implementation.
If how ever your coding for a FPGA will the number of F/F's be quite large and hence will a One hot coding give the best result. This specially true if you want to implement a statemachine with more then say 20 states.
BUT for a 5 states State Machine would it be hard to spot any diffence in the number af LUTs used.
If you right click at the Synthesize menu can you find a selection for the statemachine coding (See below)
Hope you found this useful
Jeppe