The correct option is
A True
The salt (A) is
Hg2Cl2. It is a part of calomel electrode.It is water insoluble.
It reacts with ammonia
to form (B).
Hg2Cl2+2NH4OH→H2N−Hg−Cl+Hg↓black+NH4Cl+2H2O(B) dissolves in aqua regia to form (C) which is HgCl2
(C) gives orange precipitate with KI which dissolves in excess of KI to form (D)
HgCl2+2KI→HgI2↓orangeprecipitate+2KClHgI2+2KI(excess)→K2[HgI4]