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How is the underlined gerund used in the sentence? Skating is a fun form of exercise.

A.
object of a preposition

B.
direct object

C.
subject

D.
predicate nominative
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2 Answers

To add to Vivian's comments, keep in mind that a subject in a sentence is who or what is doing the action.  
Hi again Paula;
I see nothing underlined.  However, a gerund must end in -ing.  Therefore, the word at issue must be skating.
 
It is C. subject.
 
The other answers...
A.  object of the preposition.
This is the word exercise because of is a preposition.
 
B.  direct object.
There is no such thing in this sentence because nothing is the recipient of the action created by the verb is.
 
D.  predicate nominative
This is the word form, skating is this.