You have chosen to play the 5 of Diamonds. This is correct. You are leading a low card to indicate that you have an honour in the suit. It has not been played before, so you have no idea where the strength in the suit is, but it just might be that your partner has some good cards in it.

Now looking at your remaining cards in the Dummy and in your own hand, you will play low from Dummy. There is a very common Bridge saying "SECOND HAND LOW, THIRD HAND HIGH".  This means that normally, if you are second to play to a trick, you play a low card and if you are third to play to a trick, you play a high card. In this instance, Dummy has the 8 and 4 of Diamonds, and chooses to play low, which means playing the 4.

Now it is the time for East to make a decision. Here are his Diamonds  -  K,7,3,2

Partner led the 5, Dummy played the 4.

13. Which card should West play to this trick?

a. 2
b. 7
c. King