There's no need for desperation. Take a deep breath and try to relax.
Any compass that you or I will ever get our hands on is a magnet. It works by feeling the Earth's magnetic field and lining up with it. (D)
There's another kind that's mechanically complicated, expensive, and used in airplanes and ships, called a "Gyro-compass". I'd love to have one but I don't make enough money. (And that's not one of the answer choices.)