**Core Concept**
The weight loss in a newborn is a normal physiological process, reflecting the transition from a fetal to an extrauterine environment. This weight loss is primarily due to the reduction in fetal fluid volume and the initiation of breastfeeding.

**Why the Correct Answer is Right**
Newborns typically lose around 5-10% of their birth weight in the first week of life. This weight loss is a result of the decrease in fetal fluid volume, which is composed of about 75% water. As the newborn starts to breastfeed, they begin to lose excess fluid, leading to a reduction in weight. The hypothalamic-pituitary-adrenal axis also plays a role in regulating the newborn's fluid balance and electrolyte levels.

**Why Each Wrong Option is Incorrect**
**Option A:** 1-2% weight loss is too low, as it does not account for the significant fluid shift that occurs in the first week of life.
**Option B:** 20-30% weight loss is too high, as it would be considered pathological and indicative of a serious underlying condition.
**Option C:** 5-20% weight loss is too broad, as it does not provide a specific percentage range for the expected weight loss.

**Clinical Pearl / High-Yield Fact**
Newborns typically regain their birth weight by around 7-10 days of age, marking a successful transition to an extrauterine environment.

**Correct Answer:** C. 5-10%.