Question

which of the following events from the swimming contest is the clearest indicator of the story's final outcome?

Answer 1

The event from The Swimming Contest which is the clearest indicator of the story's final outcome is C. the narrator sinks when he attempts to race across the swimming pool. 
Nothing gets clearer than that - since there the narrator is no more, there is no better way to conclude the story. 

Answer 2

C. The narrator sinks when he attempts to race across the swimming pool.