Translation:It's not far, you can walk there.
This is another funny English answer. There is nothing in the Chinese sentence that mentions 'there' as a place to go. It is only insinuated by 去. If I had not worked out the answer at the first level of TRAVEL, when given a few words to choose from, I would have difficulty in understanding where the 'there' came from. There is no 那. Why is the question not:不远，你可以走路去那 or 去那儿
Like a lot of Chinese words they are often made up of two characters incorporating a verb and noun, such as 走 and 路. 走 does mean walk, but it can be accompanied by many suffix-like characters that modify the meaning. 走 路 specifically means to go on foot, or walk on the street to get to some place.