The correct answer is: A. she lived
The sentence is in the past tense, so the correct verb form should also be in the past tense. Option A, “she lived,” is the only option that is in the past tense. Option B, “does she live,” is in the present tense, and option C, “has she lived,” is in the present perfect tense. Option D, “did she live,” is also in the past tense, but it is the past tense form of the verb “to do,” which is not the correct verb for this sentence.
The sentence is about a woman who told a man where she lived. The woman is not telling the man where she lives now, but where she lived in the past. Therefore, the correct verb form is “she lived.”