The correct answer is option 'C': the greedy neighbor was beaten to death.

Explanation:
The story suggests that the greedy neighbor faced a tragic fate due to his own greed and actions. Let's break down the details to understand why he met such a cruel end.

1. Background:
- The story revolves around a king who wanted to reward his subjects for their loyalty.
- He decided to give a bag of gold to the person who showed the most loyalty to him.

2. The Greedy Neighbor:
- The greedy neighbor, driven by his selfishness and desire for wealth, decided to take advantage of the situation.
- He falsely claimed that he was the most loyal subject and deserved the reward.
- This act of deception and greed is what led to his eventual downfall.

3. Consequences:
- The king, being wise and just, wanted to test the loyalty of his subjects before granting the reward.
- He devised a plan to determine the truth.
- The king placed a statue of himself in the garden and hid behind it, watching the reactions of the people.

4. The Greedy Neighbor's Actions:
- The greedy neighbor, in his eagerness to claim the reward, ran into the king's garden without permission.
- He saw the statue and thought that it was the king himself.
- In a show of false loyalty, he started bowing down and praising the statue, hoping to impress the king.

5. The King's Reaction:
- When the king observed the greedy neighbor's behavior, he realized his true intentions.
- The king felt betrayed by the neighbor's deceitful actions and decided to punish him for his greed.

6. The Tragic End:
- The king's guards, upon receiving the king's signal, descended upon the greedy neighbor.
- They beat him to death as a consequence of his lies and attempt to deceive the king.
- This serves as a lesson in the story, highlighting the consequences of greed and dishonesty.

In conclusion, the greedy neighbor met a tragic end because of his greed and deceitful actions. The story teaches us the importance of honesty and warns against the perils of greed.