Start from the number. A packed cell volume of 70% is far above the upper limit of normal, so something is either adding red cells or removing plasma, or both. Work out which of the offered processes does that.
Living at altitude means breathing thin air with little oxygen. The kidney senses the hypoxia and pours out erythropoietin, which expands the red cell population over weeks, a true secondary polycythemia. On top of this, the cold dry mountain air, heavy breathing and limited drinking shrink the plasma compartment, so the blood becomes concentrated and the haematocrit climbs even more.
Now weigh the rivals. Cerebral oedema at altitude shows up as confusion, headache and ataxia, and pulmonary oedema shows up as cough and breathlessness, neither being a haematocrit value. Haemodilution adds water to the blood, which would drop the haematocrit, the opposite of what we see.
The marriage of extra red cells and a dry, contracted plasma volume is the right explanation.
\[\boxed{\text{Polycythemia with relative dehydration}}\]