The correct answer is B. arrested.
The past tense form of the verb “arrest” is “arrested.” This is because the sentence is about something that happened in the past. The police arrested three people, but later they let them go. This means that the arrest happened at a specific point in time in the past.
The other options are incorrect because they are not in the past tense. The present perfect tense form of the verb “arrest” is “has arrested.” This would be used if the sentence was about something that happened recently or is still happening. The future tense form of the verb “arrest” is “will arrest.” This would be used if the sentence was about something that is going to happen in the future.
In this case, the past tense form is the most appropriate because the sentence is about something that happened in the past.