Formal.
As far as I know, there is no such thing as either standard or practiced diction. Informal is the way you communicate with your friends, for instance, which is not how you would write a thesis paper, legal document, etc.
I think the answer to this question is False
Answer:
A - El lago grande y bonito está debajo de la playa donde el animal toma agua.
This is 100% correct. This response trsnalted to english would be 'The big and beautiful lake is under the beach where the animal drinks water.'
Good luck!! xox