The correct answer is A. What he thought he saw in the upstairs window turned out to be a phantasm
Explanation:
A dictionary entry is the section of a dictionary that includes at least information about the type of word a word is, for example, noun, adjective or adverb and the denotative meaning of it or the meaning agreed by the speakers of a language. In this case, the dictionary entry presents the information about the word "phantasm" including its definition or denotative meaning "something that a person sees in his or her mind" and specifying this is a noun which means it describes an idea, place or thing.
Additionally to this, for determining whether a word is used correctly in a sentence it is important to consider both the type of word and the meaning of it. Considering this, the sentence that uses this word correctly is "What he thought he saw in the upstairs window turned out to be a phantasm", because in this sentence, the word "phantasm" is used as a noun which can be identified by the article "a" used only before noun and the definition "something that a person sees in his or her mind" fits with the context of the text, considering the image or thing the person of the sentence saw was only on his mind, which is exactly the definition presented in the dictionary entry.