The narrative point of view is third person point of view.
Yes, the correct answer among the following choices given would be option C, " The Swallow dies."
Both sentences A and B are capitalized correctly:
Only one solution is possible: We must cut our expenses.
Only one solution is possible: we must cut our expenses.
The first word of both sentences (only) must always be capitalized since it is placed at the beginning.
On the other hand, if the sentence following the colon is dependent (it is incomplete), its first word should not be capitalized. For example:
"I have to buy three things: apples, oranges and bananas."
Regarding capitalization in independent clauses following a colon (such as the one given in the example), it is subject to the citation style the writer is following (APA, MLA, etc). While some styles recommend capitalization of the first word of the sentence, some others do not.
If I was a queen, I would like to be peaceful and patient with everyone. Although cliche, and may not work, being patient to those who need listening to usually works in situations.