Option D - Select the warped text menu from the option bar and set the style to arc is the right answer.
To warp text in photoshop, use the following steps.
- Select the Text tool and type your text.
- After selecting the text layer and type tool active, click on the "create warped text" icon in the tool bar.
- In the wrap text window, select the "Arc" style, check the horizontal option and set the bend value to about 20% then click OK.
- Selecting the curved text tool from the tool window will not create an arc, you sure can curve a text in photoshop, placing each letter one at a time will take much time. The best option is D.