The correct option is
C playing
Answer : A
In the sentence, "They" is the Subject, "play" is the base form of the verb (as you can make out from the options) and "swimming pool" is the object.
The structure of the sentence is that of Active Voice, i.e. Subject + Verb + Object. The subject is directly acting on the object.
And according to the grammar rules, the the gerund form of the verb can be used as objects in sentences with Active Voice.
The gerund form can be made by adding "ing" to the base form of the verb.
Here, the gerund verb of "play", is "playing".
And thus, the correct complete sentence is:
They prefer PLAYING in a swimming pool.