The correct answer is A. Necrobiotic degeneration of dermal collagen surrounded by an inflammatory reaction.

The lesion shown is consistent of granuloma annulare. This lesion is typically annular with an elevated raised border and depressed center. Characteristically these lesions have no scale or epidermal change.

The typical histological features that are seen on a skin biopsy of granuloma annulare are: necrobiotic degeneration of dermal collagen surrounded by an inflammatory reaction.

Layers with open-ended necrobiotic foci; lack of mucin and increased numbers of plasma cells are seen in necrobiosis lipoidica.

Larger areas of eosinophilic necrobiosis and a lack of mucin deposition are observed on the histology of a rheumatoid nodule.

Immunohistochemistry revealing cytokeratin and epithelial membrane antigen (EMA) positivity are seen in an epithelioid sarcoma.

Eosinophilic areas of necrosis and an atypical infiltrate on closer inspection are seen in epithelioid sarcoma.