Step 1: Use the principle of inclusion-exclusion.
Let the total number of students be \( 250 \). We know the number of students studying French, German, and Spanish are 40%, 30%, and 50% of 250, respectively. Therefore:
- French: \( 0.40 \times 250 = 100 \)
- German: \( 0.30 \times 250 = 75 \)
- Spanish: \( 0.50 \times 250 = 125 \)
We are also told that 10 students study all three languages. To find how many students are studying exactly two languages, we will use inclusion-exclusion. First, let's calculate the total number of students who study at least one language:
\[
\text{Total students} = 100 + 75 + 125 - \text{students studying two or more languages}
\]
Since 10 students study all three languages, the number of students studying exactly two languages is 40. Therefore, the correct answer is (C).