Their answer is wrong, actually.
First, we know that it cannot be A (object of preposition) because their is no preposition.
Second, it cannot be C (direct object) because a direct object recieves the verb. In this case, stories recieves the verb reads.
So, it must be an indirect object (B) because an indirect object answers the questions to whom?
So the answer is (B) indirect object because him answers the question to whom?