Take the initial rocket mass to be $M$ and the cumulative quantity of propellant ejected to be $m$, which will be used interchangeably as a dynamic variable and for the final answer. Unit-wise, I will use exclusively $\beta=v/c$ for representation of velocities of all types. I am intentionally avoiding using time in my equations. The essence of the problem is that the velocity depends on the quantity of propellant ejected up until that point (and problem parameters), so I'm going to be finding a solution for $\beta(m)$, that is, the speed of the craft as a function of the mass ejected up until that point. I'm going to consider the problem in the "rest" reference frame, which is more formally defined by the inertial reference for which it is true that $v(0)=0$. I'll use the shorthand of the $\gamma$ function, $\gamma(\beta) = (1-\beta^2)^{-1/2}$.
The first real physics I'll do here is to dissect a specific reaction. I define the specific point-in-time I'm talking about as the point when the moving rocket has mass of $M-m+dm$. It then ejects $dm$ at speed $\beta_e$ relative to itself in the direction opposite of motion. This ejection increases the rocket's momentum by $dp$ as the ejected mass' momentum changes from $p_{dm}$ to $p_{dm}'$ at speeds of $\beta$ and $\beta_{dm}'$. Relativistic velocity addition must be done to obtain the latter.
$$\beta_{dm}' = \frac{\beta-\beta_{e}}{1-\beta \beta_e}$$
Now the reaction momentum balance is written.
$$dp = p_{dm} - p_{dm}' = dm \gamma(\beta) \beta - dm \gamma(\beta_{dm}') \beta_{dm}'$$
$$\frac{dp}{dm} = \gamma(\beta) \beta - \gamma(\beta_{dm}') \beta_{dm}' = \frac{\beta}{\sqrt{1-\beta^2}} - \frac{\beta-\beta_e}{1-\beta \beta_e} \frac{1}{\sqrt{1-\left(\frac{\beta-\beta_e}{1-\beta \beta_e}\right)^2}}$$
Now I hope that by this point it's blatantly obvious what I'm doing. I'm attempting to formulate a differential equation where $m$ is the independent variable and we solve for $\beta(m)$. But we still need the left hand side of that equation. In order to find this we must continue thinking about the balances of the stated interaction and find the change in momentum of the non-ejected part of the rocket, $dp$, after that approximations can be made. The momentum of the non-ejected part of the rocket is $p$ before the ejection and $p'$ after the ejection.
$$dp = p' - p = (M-m) (\beta' \gamma(\beta') - \beta \gamma(\beta))$$
$$\beta'-\beta = d\beta << \beta_e$$
$$dp = (M-m) ((\beta+d\beta) \gamma(\beta+d\beta) - \beta \gamma(\beta))$$
2nd order series expansion about $d\beta=0$.
$$dp = (M-m) d\beta \gamma(\beta)^3$$
Alternatively, this can be found by differentiating. The reason simple differentiating is so hard is that you have to identify what it is you take the derivative of. In order to be consistent with the physics of the situation I had to introduce a special $m''$ variable, which is an invariant form of $m$, although having the same value. Basically, $m''$ is not affected by the loss of $dm$ but $m$ is. Starting from here I have to start writing $\beta$ in terms of $\beta(m)$ as well, which is the objective. Pardon the sudden change in notation. Here is the calculus approach to $dp$.
$$\beta = \beta(m)$$
$$\frac{dp}{dm} = \frac{d}{dm} \left( (M-m'') \beta(m) \gamma(\beta(m)) \right) = (M-m'') \frac{d\beta}{dm} \gamma(\beta)^3 $$
Either approach gives the needed expression for the next step, which is to simply write the differential equation that is the solution to the problem. Pardon the switch back to suppressing the $m$ dependence again (so it fits on the line), just know that it's really $\beta(m)$ and that $\beta_e$ is constant.
$$(M-m) \frac{d\beta}{dm} \gamma(\beta)^3 = \frac{\beta}{\sqrt{1-\beta^2}} - \frac{\beta-\beta_e}{1-\beta \beta_e} \frac{1}{\sqrt{1-\left(\frac{\beta-\beta_e}{1-\beta \beta_e}\right)^2}}$$
$$\beta(0)=0$$
And we're done. This is your answer. With $M$ and $\beta_e$ specified you can find $\beta(m)$ which is the speed of the rocket as a function of the mass ejected, but remember that $m<M$. I'll give a sample plot. This is showing the function of $\beta$, which again is the fraction of the speed of light the rocket is going.
$\beta_e=0.1$ and $M=1$
There are some approximations you can get, of course. Doing a 2nd order taylor expand of the RHS of the diff equation above will result in the following solution.
$$\beta = tanh \left( \beta_e ln(\frac{M}{M-m}) \right)$$
And if you simplify even further ($tanh(x)=x$) you'll get the classical version.
$$\beta = \beta_e ln(\frac{M}{M-m}) $$
The first of these seems to be a fairly good approximation, but only for $\beta_e<<1$. Obviously $\beta_e$ and $m$ are relevant to the answer, unless you made some different assumptions I did. I find it most likely, however, that whoever argued the question only has 1 answer out of a, b, c does not have a coherent argument for it.
Edit: had $\sqrt{2}$ factor incorrectly because I typed in an equation wrong. Fixed it now, consistent with Wikipedia for 1st approximation.
When $\beta=1$
In this case, even the very first equation written for $\beta_{dm}'$ is invalid, and we must return to the drawing board for calculating $dp$. I'll have to approach this considering the emission of a single photon, so my notation will be that $dp$ and $dm$ refer to the change in momentum and mass of the rocket according to the stationary observer due to the emission of a single photon. The frequency of the light according to the spacecraft will be $\lambda_e$ and in stationary frame, $\lambda_o$.
$$dp = \frac{h}{\lambda_o}$$
$$p c = \frac{h c}{\lambda_o} = E = c^2 dm \rightarrow dm = \frac{h}{c \lambda_o}$$
$$\frac{dp}{dm} = c$$
Turns out we don't need to do anything with redshift, or even need to know the light frequency! I actually expected that, so it's ok. My previous $dp$ by the way, was the wrong units. I should have written $p=c \beta \gamma(\beta)$, but if you're find with the answer being in terms of $\beta$, then why bother? So I'll just fudge it so that $dp/dm=1$. Now we can take the previous expression for that quantity and set it equal to 1 to find the DE for $\beta(m)$.
$$\frac{dp}{dm} = (M-m) \frac{d\beta}{dm} \gamma(\beta)^3 = 1$$
$$\beta(0) = 0$$
The solution:
$$ \beta = ln{ \frac{M}{M-m} } \sqrt{ \frac{1}{ 1+ ln{ \frac{M}{M-m} }^2 } }$$
I'll plot this with all the others discussed.
M = 1.0, beta_e = 0.5
- Zassou - My answer in the form of the complete diff equation. Numerically I was only able to evaluate up to $m=0.8$
- Wikipedia - the tanh( ln( .. )) solution that is also in the wikipedia article for this, it's valid for $\beta_e<<1$, and shows some deviation from the actual here because of it, and when $\beta_e$ gets close to 1 you can see a lot more bending of the curve
- Jerry - formula he gave in his answer
- Newton - obviously the classical case, flies off to super-luminary speeds of course
- Photon - equation I just gave - note this DOESN'T solve the same problem since $\beta_e$ is different, which is evidenced by the initial slope