Explanation:

- Rashmi said, "My father's daughter" which refers to Rashmi herself.

- She continues, "is the sister of this lady's daughter."

- This means Rashmi is the sister of the lady's daughter.

- Therefore, the lady is Rashmi's mother, as Rashmi is the sibling of the lady's daughter.

*Option Analysis:*

1. Mother - The lady is Rashmi's mother, since Rashmi and the lady’s daughter are sisters.

2. Daughter - Rashmi is not old enough to be the mother to the lady.

3. Sister - The lady cannot be her sister because Rashmi is not directly saying they share the same parents.

4. Mother-in-law - Doesn't fit because Rashmi didn't mention any link to a husband.