Frequency capping counts include:

A) only impressions that led to clicks
B) all impressions, including those that weren’t viewable
C) all impressions appearing in an ad position of “1”
D) only impressions that were viewable

The correct answer is:

C) all impressions appearing in an ad position of “1”

Explanation: Frequency is the average number of times a unique user sees your ad in a position of “1” over a given time period. Use frequency capping to help control the maximum number of times that you’d like each person to see your ad on the Display Network.
Read more here: https://support.google.com/adwords/answer/117579