Final answer:
Extracellular water includes vital fluids such as blood plasma and interstitial fluid, crucial for maintaining homeostasis in the body.
Step-by-step explanation:
The question pertains to the location and function of extracellular water. Extracellular water refers to all body fluids outside the cells, which includes the blood plasma, interstitial fluid, and lymph. These fluids are key in maintaining the body's homeostasis by contributing to the balance of electrolytes, transporting nutrients and wastes, and facilitating various physiological processes. The correct option is: C. includes plasma and tissue fluid.