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D is corrent. A discharge or release of one cosurety by a creditor results in a reduction of liability of the remaining cosurety. The remaining cosurety is released to the extent of the released cosurety’s pro rata share of debt liability, unless there is a reservation of rights by the creditor against the remaining cosurety. Frey and Harp each had maximum liability of $100,000. Thus, Lux’s release of Harp will result in Frey’s liability being reduced by Harp’s pro rata share of the total debt liability which was one half. Therefore, Frey’s liability has been reduced to $50,000 (i.e., 50% of the loan balance) due to the release of Harp as a cosurety.
A is incorrect. A discharge or release of one cosurety by a creditor results in a reduction of liability of the remaining cosurety. The remaining cosurety is released to the extent of the released cosurety’s pro rata share of debt liability, unless there is a reservation of rights by the creditor against the remaining cosurety. Frey and Harp each had maximum liability of $100,000. Thus, Lux’s release of Harp will result in Frey’s liability being reduced by Harp’s pro rata share of the total debt liability which was one half. Therefore, Frey’s liability has been reduced to $50,000 (i.e., 50% of the loan balance) due to the release of Harp as a cosurety. 
B is incorrect. The release of the cosurety does not release the principal debtor since the debtor’s obligation is not affected in any way by Lux’s release of Harp.
A is incorrect. A discharge or release of one cosurety by a creditor results in a reduction of liability of the remaining cosurety. The remaining cosurety is released to the extent of the released cosurety’s pro rata share of debt liability, unless there is a reservation of rights by the creditor against the remaining cosurety. Frey and Harp each had maximum liability of $100,000. Thus, Lux’s release of Harp will result in Frey’s liability being reduced by Harp’s pro rata share of the total debt liability which was one half. Therefore, Frey’s liability has been reduced to $50,000 (i.e., 50% of the loan balance) due to the release of Harp as a cosurety.