The correct answer is option D, that is, two new compounds.
Double displacement also known as double replacement reactions, metathesis or exchange reactions. It take place when two ionic compounds are exchanged forming two new compounds. One can consider the reaction as swapping the anions or the cations.
Water usually functions as the solvent for a double replacement reaction, and the products and reactants are generally ionic compounds, however, they can also be bases or acids. The example of a double replacement reaction is:
BaCl₂ (aq) + Na₂SO₄ (aq) = BaSO₄ (s) + 2NaCl (aq)
In this, the cations are Na⁺ and Ba²⁺, and the anions are SO₄²⁻ and Cl⁻. If the anions or cations are swapped, the products obtained are BaSO₄ and NaCl.