The answer should be (E).
As for the distinction between (D) and (E), the issue of verb tense comes at play.
the v-ing action (involving) sets the background whereas the main action in simple past (
resolved) is on the foreground. The sentence focuses on the event --
hostage negotiators finally resolved a situation. But what is the situation? Okay, here I'm gonna provide background information:
the situation involving bla bla. Therefore, the v-ing form in (E) is justified, whereas the past tense "involved" in (D) fails to clarify the temporal and logical links of these two events/actions, both in simple past.
Here's an example sentence, courtesy of Ron
OG-12 QUESTION 95, correct sentence as below:
The peaks of a mountain range, acting like rocks in a streambed, produce ripples in the air flowing over them; the resulting flow pattern, with crests and troughs that remain stationary although the air that forms them is moving rapidly, is known as "standing waves."
See here for Ron's explanation:
https://www.beatthegmat.com/the-peaks-of ... 30-15.html
Also, regarding the point that Brian raised, "no comma + v-ing" form is a noun modifier that modifies the closest preceding noun,i.e."situation", so there's no problem in (E).
"no comma + v-ing" is a noun modifier
"comma + v-ing" is an adverbial modifier, unless there is no complete clause preceding it (e.g. an official sentence: "Neuroscientists, having amassed ... in the past 20 years, are now drawing solid conclusions ....")
Target2009 wrote:After 12 hours, hostage negotiators finally resolved a situation involving three bank robbers and 35 hostages; their efforts were rewarded generously by the grateful bank management.
A. involving three bank robbers and 35 hostages; their
B. involving three bank robbers and 35 hostages; the hostages'
C. which involved three bank robbers and 35 hostages; their
D. that involved three bank robbers and 35 hostages; the negotiators'
E. involving three bank robbers and 35 hostages; the negotiators'
[spoiler]Source : Not from any CAT, came across in some trial material.[/spoiler]