(A) is an attractive answer choice but it is too strong, nowhere in the passage it says that a nation must have certain knowledge - belief is sufficient - and it need not believe it will be destroyed, rather that it would not be able to defend itself, which does not necessarily equal total destruction.
(D) is the correct answer choice. If what we concluded above is true and the theory only works if the aggressor believes that he is unable to defend against a retaliatory attack, it is in the best interest of a nation to make a potential aggressor aware of its power of a retaliatory attack. The fact that it possesses such military capability alone is insufficient to deter a potential attack if the attacker is unaware of it, rendering military deterrence theory inapplicable in this scenario;
Let me know if this makes sense and if you have any other questions.