The correct answer is D. Grendel.
Although the same characters appear in both Beowulf and Grendel, their characteristics are not the same. Whereas in Beowulf, the round character would be Beowulf, in Grendel that would be Grendel.
A round character is one who is fully characterized, who changes over the course of the play, who shows real and deep human emotions that we can empathize with. Having that in mind, the obvious answer is Grendel - unlike in Beowulf, where he is just a brainless monster, in Grendel he is something more, akin to a human almost, and even more than that.
