The letter O is typically used for the center of a circle, but it's also used for all kinds of other points - the origin in coordinate geometry, for example. Just because you see a point labeled 'O' in the diagram above is not sufficient reason to conclude you're looking at a semicircle. If this were a real GMAT question, they'd either tell you very clearly that the figure included a semicircle, or the answer would be E.
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