If your teacher said that the answer is "d) does not exist" then they're wrong. The answer is "c) 0" no doubt about it. You were correct, but you can be more formal in your answer. Start by noting the properties of limits of composite functions:
\(\displaystyle \lim_{x \to a} g(f(x)) = g(\lim_{x \to a} f(x))\)
This identity requires two conditions to hold true. One, \( \lim\limits_{x \to a} f(x) \) must exist (i.e. it's equal to some real number \(L\)); Two, \( g(x) \) must be continuous at that point \( x = L \).
In your problem, you have \( g(x) = \sqrt{x} \). \( f(x) \) is left unspecified, but the text does give you exactly the first condition. Therefore, it must be the case that:
\(\displaystyle \lim_{x \to a} \sqrt{(f(x)} = \sqrt{\lim_{x \to a} f(x)} = \sqrt{0} = 0\)
The only reason why it might seem like this isn't the case is by considering a function such as the one pka suggested \( f(x) = x^3 \). In that case, it may seem like \(\displaystyle \lim_{x \to 0} \sqrt{x^3}\) doesn't exist because the function itself fails to exist for \(x < 0\). However, this is where we encounter a bit of a loophole, in that limits of functions with restricted domains need not always be two-sided. It's true that:
\(\displaystyle \lim_{x \to 0^{-}} \sqrt{x^3}\) doesn't exist
But the overall limit is, in this specific case, equal to the one-sided limit approaching from above. This occurs for the limit approaching any constant \(a\) for any f(x) that is undefined on the interval \(\displaystyle (a-\delta, \: a)\) for all \( \delta>0 \).
We know that \( f(x) = \sqrt{x^3} \) is undefined for negative inputs, so we can guarantee that \( f(x) \) is undefined on the interval \(\displaystyle (-\delta, \: a)\) for all \( \delta>0 \) and therefore:
\(\displaystyle \lim_{x \to 0} \sqrt{x^3} = \lim_{x \to 0^{+}} \sqrt{x^3}\)