Lane Is a Manager Working with a Diverse Team

Lane is a manager working with a diverse team. The fact that there are many differences, including race, culture, and gender, between the different members of the team has long been a topic Lane has tried to avoid, but one day one of her subordinates says that because Lane is a white woman, she almost certainly has prejudices against him as a person of color. He says it under the guise of humor, but the moment is still a tense one, especially because she sees that several other subordinates are listening in. The best approach for Lane is to

A) let the employee know that what he said was very much out of bounds because topics of race and culture are simply not discussed in an office environment.
B) agree with his appraisal of her and admit that as a white person, she is undeniably trapped in biases she may not be able to overcome.
C) admit that she probably has biases she does not even know about and invite the team to discuss what those biases might be and what biases each of them might have as well.
D) sharply reprimand him for his insubordination and let him know that the next time he makes such a "joke" at his expense, she will bring him up for disciplinary action.
E) explain that it is simply impossible for her to have unexplored biases because she has gone through diversity training and examined that issue thoroughly.