Correct answer:
C. el muchacho se lo dio
This is the case of indirect and direct object working together. An Indirect Object Pronoun is a person that, in an indirect way, takes the action of a verb. So it tells us to whom or for whom an action is done. On the other hand, a direct object is a noun that receives, in an direct way, the action of a verb and the direct object pronoun replaces the direct object. So lo is the direct object pronoun for the third person singular in masculine form while se comes from the indirect object le or les because these two form changes to se when working along with a direct object pronoun.
