Beowulf is set among Anglo-Saxon tribes before they migrated to England. The answer is a.
C. Puzzled
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I hosted a birthday party last Sunday and the guests A. wreaked havoc on my house!
The collocation (two or more words that often go together) is to wreak havoc, so only A can be the correct answer.
To reek means to stink, to wreck means to destroy (but you cannot wreck havoc), and rect isn't a word in English.
The answer to your question would be that the literary device that enables readers to have mulitiple interpreations of a word, phrase, or event is the following one: ambiguity. That is, the correct option would be C.
Ambiguity, also known as fallacy of ambiguity, is a word, phrase, or statement which contains more than meaning. These words or statements lead to confusion. For instance, "Yesterday I rode a horse with sunglasses" is ambigous because it can be taken as if the one with the sunglasses was the horse.