Which of the following contains a vague pronoun reference?

 - The fleece jacket that Amy saw on the bench looked like Katie's.
 - Amy told Katie that the fleece jacket on the bench looked like hers.
The second answer choice contains a vague pronoun reference. The pronoun hers could refer to Amy's or Katie's.
Amy told Katie that the fleece jacket on the bench looked like hers.
The first answer choice shows a possible correction for the vague pronoun reference. The text has been rewritten so that the meaning is clear.
The fleece jacket that Amy saw on the bench looked like Katie's.