Explanation:

assume like A = ramu, B= sita

C=anaya, E=varun

So from the above given relation ramu(A) and sita(B) are husband wife(A is the husband of B). and anaya(C) is the daughter of ramu(A)[i.e. A is the father of C]. SO B(sita) is the grandmother of E(varun).

Hence, option 2 is the correct answer.