The answer to this is letter B. Percival says that the beast comes from the sea. He says that aside from the beasts, there are even frightening squids that can be found at sea. In fact, Percival says that the beast is in squid form and it becomes a ghost when it reaches dry land.
It will be able to attack its prey without being seen and this realization is particularly frightening for them. This has prompted the others to talk about things that are scary to them such as ghosts. This is when Piggy decided to declare that he does not believe in ghosts that caused Jack to become angry. He tried to make Piggy angry too by taunting him.