The correct answer is B. Lo compré. This would make the entire paragraph read as: Ya tengo el regalo perfecto para mi hermana. Lo compré en el mercado de artesanías.
This translates to: I already have the perfect gift for my sister. I bought it in the craft shop.
We choose option B because the correct verb is "compré", the preterite form of the verb comprar, meaning to buy. The direct object pronoun in this instance should be "lo", because we are trying to replace the word "el regalo" which is singular and masculine. (Remember: Lo-singular masculine, la-singular feminine, los-plural masculine, las- plural feminine). When we replace the noun "el regalo" with its respective direct object pronoun, the noun becomes the word "it".
Hope this helps!
