Answer : The correct answer is-
B) mitochondria and chloroplasts evolved from small prokaryotes living within larger cells.
Endosymbiotic theory is an evolutionary theory that describes the origin of mitochondria and chloroplast (cell organelles of eukaryotes) from the prokaryotes.
These two organelles share characteristics with bacteria as they both have circular DNA, capable of self replication, transcription, and translation.
It is beleived that prokaryotes used to live in symbiotic association with larger cells and later they developed into these organelles (particularly "alpha proteobacteria" developed into 'mitochondria' and "cyanobacteria" developed to '' 'chloroplast').
According to this information, option B) is the right answer for theory of endosymbiosis.