Aside from the deficient punctuation pointed out by Tyler James Young, all of these sentences are acceptable formal English.
However, I think it very likely that your teacher wants you to identify sentence C as incorrect. As Tyler James Young (again) points out, use of understand in the present progressive is unusual, and you have probably been taught that it is ungrammatical. That‘s not true; but it is a ‘baby rule’ which is taught in the earlier stages of English instruction to keep students from using this construction until they have a sound understanding of when they can and when they cannot use it.
The use of progressive constructions with stative verbs like understand, know, love, and be has been discussed frequently on ELL; and in fact their use specifically with understand is addressed here.