Read the excerpt from Adam's personal narrative.

I stepped into the tidal pool carefully, wishing I had brought my water shoes. "What's the matter, afraid of a few crabs?" Laura smiled. "It doesn't hurt that much when they pinch. They're only little," she said. Laura wasn't afraid of anything, or at least I'd never seen her get scared. She was the type to dive off a cliff and not even think about what was in the water below.

"But there are so many of them!" I winced.

"I know, it’s so cool!" she replied, scooping a crab into her hand to look at it more closely. I nearly screamed.

How does this paragraph develop the characters in the dialogue?

It explains to the reader where the characters are and what they are doing.
It shows that Adam is afraid of what is in the water, but Laura is fearless and likes to tease him.
It shows that Adam is interested in learning more about the crabs, but Laura is ignoring him.
It explains to the reader how long Adam and Laura have known each other