Answer:
He helps her with her fear of monsters by going along with it. He calls it the Imaginary Demon. By making her fear seem like a "real" thing, it adds humor to it and makes it less frightening.
Your first option, "I have taken all the stress I can stand.", is a line of dialogue.
Dialogue is speaking/talking. The second and last options cannot be examples of dialogue because they are not being spoken (you can tell by the lack of quotation marks).The third option is also incorrect because it is what is written, as it says "the study reported" (the study does not speak). Therefore, the first option is correct.
It means conditions that are on the margin, the margin being that region of the operational envelope that is right on the edge between acceptable and unacceptable.
