I would say "at a loss FOR words" and it would mean B - you COULD speak, but didn't know what to say.

This is a terrible exercise! 1. The English is wrong. The correct expression is 'at a loss for words.' 2. Both answers are possible - you were shocked, so you couldn't speak because you didn't know what to say at that moment.

Great ! at a loss for words It means impotent to think of something to say If I was alone with you, I'd feel at a loss for words.