The sentence that contains a participle functioning as a verb is: The blinking sign warns drivers of a sharp curve ahead.
In this sentence, "blinking" is a present participle that describes the sign, functioning as an adjective. However, the main verb in the sentence is "warns," which is not a participle.
To clarify, a participle functioning as a verb would typically be used in a continuous tense (e.g., "is waiting"). Therefore, a better example of a present participle functioning as a verb would be "The students are waiting for the bus."
If the question is asking for a participle that acts as part of a verb phrase, then "waiting" in "The students are waiting for the bus" is the correct answer.