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Option 2 : B

Correct option - 2

Words like appear, seem, often, etc. are used in simple present tense. And, subject "painting" is a singular noun, so according to sub-verb agreement, singular verb should be used. Hence, replace is appearing with appears. Hence, option 2 is the correct answer.

Correct sentence - This painting of Pablo Picasso appears as a fine example of modern art. 

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