Ten months
after credit markets had frozen and had deepened the recession, many companies, while still hurting, are seeing signs of bottom and are growing cautiously optimistic about an uptick by year's end.
Understanding the meaning of the sentence is very crucial in this question. The sentence imply that there were series of event which are connected. First" Credit market frozen and deepened the recession" and Second its effects could be seen after ten months : many companies are seeing signs of bottom and are growing cautiously.
A. after credit markets had frozen and had =
Wrong: as part participle (Had) normally uses for series of even. Though in this sentence two events are mentioned but the later non underline portion is in present continuous tense. Hence Tense error.
B. after credit markets has frozen and =
Wrong: as "after" and "present participle tense" create confusion. Moreover has is wrongly used with Plural noun "Credit Markets"
C. after credit markets have frozen and =
Wrong: as "after" and "present participle tense" create confusion
D. later credit markets froze and =
Wrong: As it distort the meaning
E. after credit markets froze and =
Correct: simple past tense is used.