Answer:
Lily is confident that Margaret can ride, but Mr. Connolly disagrees because she is a girl.
Explanation:
From the given passage from "Demon's Run", we can know from the conversation between the characters that Margaret will be the one <em>"who will race for a claim and then wait for the others"</em>. Mr. Connolly had presumed Benjamin will be the one, but rather, he was told that Margaret will be the runner.
When Mrs. Connolly exclaimed <em>"Margaret?"</em>, we can infer that she was surprised to hear it'll be a girl who'll be the runner. Mr. Connolly's implication that <em>"she can’t go riding out there with all those rough men"</em> implies that he too finds it shocking to hear of a girl racing among the men. With Lily's confident assurance of Margaret being <em>"the better rider"</em>, we can safely say that Lily's confidence in Margaret's ability is different from Mr. Connolly's belief that she can't as she's a girl.
Thus, the correct answer is the second option.