At arm's length means at a distance, especially to avoid close involvement. The correct answer is this meaning because the expression is used figuratively, not only by its literal words.

Examples:

• The manager kept the controversy at arm's length.
• In an HSC essay, At arm's length can express this meaning: at a distance, especially to avoid close involvement.
• When this expression appears in a passage, connect At arm's length with the idea of at a distance, especially to avoid close involvement.