$char(20)$ means, a complete space of $20$ characters is allocated for the variable
$varchar(20)$ means, the variable can take space upto $20$ characters, but if assigned less characters it will take less space.
$A(varchar(20))='xyz',$ takes only $3$ characters space.
$B(char(20))='lmnop',$ takes $20$ characters space.
So, $(C)$ should be correct