Final answer:
The literary reference Horatio thinks of when he sees the ghost in Shakespeare's 'Hamlet' is Caesar's assassination, and this reference is known as an allusion.
Step-by-step explanation:
The literary reference that Horatio thinks of when he sees the ghost in William Shakespeare's play Hamlet is a) Caesar's assassination.
This event from Roman history is mentioned as a parallel to the appearance of King Hamlet's ghost, suggesting an omen of bad fortune or a significant change in the state of Denmark, similar to the supernatural occurrences leading up to Julius Caesar's assassination.
This type of reference is called an allusion, which is a brief and indirect reference to a person, place, thing, or idea of historical, cultural, literary, or political significance.