The correct answer is d. Mom and Dad spend their free time cycling and swimming.
Option a is not correct becuase CD players is plural but it is singular.
Option b is not correct because Kim and Rachel have different houses but this sentence "their" is used collectively.
Option c is not correct because members of the club could mean females or males. Her is specifically for females, but, grammatically, when we do not know the gender, we use his.
Option d is correct because Mom and Dad are together while spending this time. They are collectively cycling and swimming.
Hope this has helped you :)