This question appeared recently in the English-education insert that typically accompanies the Korea Herald newspaper. It is from a semi-daily section called "John's GRE Prep".
I rejected choices (A) and (B) immediately, but none of the other three seemed like knockouts. I was doing this on the subway, so I may have been unable to properly concentrate. But the real reason I think I got it wrong was that I was led astray by Matthew, Mark, Luke, or John (no relation to the John of John's GRE Prep), whichever one of them recounted the Prodigal Son parable.
My knowledge of the famous Prodigal Son parable has led me to believe, from a young age, that "prodigal" means "rebellious". "Rebellious" is not really a good candidate to be an opposite of "frugal", I thought, so I gave that one a low-mental-ranking. I wavered. No choices seemed right. My final choice was (D). That was wrong. The correct answer is (E).
"Prodigality", it turns out, has the following definitions (according to this): 1. Extravagant wastefulness. 2. Profuse generosity. 3. Extreme abundance; lavishness. / Not "rebelliousness" at all. Since age 9 or so, I've inferred that the word was tied-in with the theology of that particular parable, which is more about the rebelliousness of the son, turning away from the father, and not about the son's "lavish wastefulness".