The key thing to notice here is : The given expansion is in octal system i.e. base 8..
Given expansion : 3 × 512 + 7 × 64 + 5 × 8 + 3
= 3 × 83 + 7 × 82 + 5 × 8 + 3
= (3753)8
= (011 111 101 011)2
Hence number of 1's in given expansion = 9.
Hence B) should be correct option.