The correct option is 20% profit.

To understand why, let us break down the problem step-by-step:

Let the original cost of the watch be represented by $X$.

According to the problem, Ram purchased the watch at
$\frac{9}{10}$
of the original cost. Therefore, Ram's Cost Price (CP) is:
$\mathrm{CP}=\frac{9}{10}X=0.9X$

Next, he sold the watch at 8% more than the original cost. Therefore, the Selling Price (SP) is:
$\mathrm{SP}=X+8\%\text{ of }X=X+0.08X=1.08X$

Since the Selling Price is greater than the Cost Price ($1.08X>0.9X$), Ram made a profit.
The profit amount is calculated as:
$\text{Profit}=\mathrm{SP}-\mathrm{CP}=1.08X-0.9X=0.18X$

Now, we calculate the profit percentage based on Ram's actual Cost Price:
$\text{Profit Percentage}=\left(\frac{\text{Profit}}{\mathrm{CP}}\right)\times 100$
Substituting the values we obtained:
$\text{Profit Percentage}=\left(\frac{0.18X}{0.9X}\right)\times 100$
Simplifying the expression:
$\text{Profit Percentage}=\frac{18}{90}\times 100=\frac{1}{5}\times 100=20\%$

Thus, Ram earned a profit of 20%.