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Increasing the RAM of a computer typically improves performance because:

1. Virtual Memory increases

2. Larger RAMs are faster

3. Fewer page faults occur

4. Fewer segmentation faults occur

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A segmentation fault means a program tried to access an invalid or illegal memory address,it is not related to size of memory .It will be not a valid point.
https://en.wikipedia.org/wiki/Segmentation_fault#Handling

So, answer $\rightarrow$ (C).

1. Virtual Memory increases $\rightarrow$ This option is false. Because Virtual Memory of Computer do not depend on RAM. Virtual Memory concept iteself was introduced so Programs larger than RAM can be executed.

2. Larger RAMs are faster $\rightarrow$ No This option is false. Size of ram does not determine it's speed, Type of ram does, SRAM is faster, DRAM is slower.

3. Fewer page faults occur $\rightarrow$ This is true, more pages can be in Main memory .

4. Fewer segmentation faults occur  $\rightarrow$ "Segementation Fault" $\rightarrow$ A segmentation fault (aka segfault) is a common condition that causes programs to crash; they are often associated with a file named core . Segfaults are caused by a program trying to read or write an illegal memory location.  It is clear that segmentation fault is not related to size of main memory. This is false.

edited by
+5
Although I accept that (C) is the best choice but I think that (A) is not completely wrong. Because with more RAM we can afford larger virtual memory size without worrying about thrashing and thus could keep more number of processes in the memory which will increase utilization of CPU and hence its performance.
+13
Whenever you get a segfault you know you are doing something wrong with memory – accessing variable that has already been freed, writing to a read-only portion of the memory, etc.

http://stackoverflow.com/questions/2346806/what-is-a-segmentation-fault
+3

VM in a system can be increased up to maximum free size available on secondary storage.

+1
@Akash

then if a referred segment is not present in M.M, then what that condition is called..?

Is it segment fault....?
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The size of virtual storage is limited by the addressing scheme of the computer system and amount of secondary memory is available not by the actual number of the main storage locations.
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it will increase the physical memory not the virtual one actually
Option c.

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