1. I agree with James. A, B and C are all correct. Don't let anyone try to convince you otherwise.
This ill-conceived 'test' was written either by a non-native who didn't realise that it had three possible answers, or a native who didn't notice. However, if you have to give answer only, I suspect that it is supposed to be B - the 'must' of assumption/supposition. But you can't discount either A or C. A reputable exam board would never present its students with such a dreadful test.
2. It's correct, and as James says, you need the 'to'. Otherwise, you could use a gerund '..is raising'.