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Option 2 : 2

The error lies in part B of the sentence. Thus, the correct option is 2.

The preposition ‘in’ is used when unspecific time is indicated or when names of town, state or countries/ spaces  are used.

For example: My hometown is Kolkata, which is in West Bengal.

The given sentence is specifying a place i.e. Harvard

When an address or place is referred in the sentence ‘at’ is used as preposition.

Correct sentence- They study at the Harvard School of Business.

 
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