Answer is D.
Explanation: Product is a standard object, therefore a M-D relationship cannot be made on Product to Component as that would make Product the child object (which standard objects cannot be).

Components can be used on multiple products and products can have multiple components.
Deleting components or product shouldn't result deletion of the other, so it's many to many relationship rather than master detail. Hence junction object should be created.

Question is not well written. Maybe the component can exist without necessarily being assigned to a product. In this case, the Junction object makes a lot of sense. Think about, let`s say... Wheels on a Car... you can say that a specific wheel is part of a car (a component), but it can also be a component of another car (another product), therefore it is not necessarily dependant on the product.
They way it is written, A, C or D could do the job, depending on the scenario...

Actually there should be 2 answers considered as true A,D

@aaa, why M:D? Can component exist without product?

It should be a master-detail relationship...