An astronomical refracting telescope will have large angular magnification and high angular resolution, when it has an objective lens of :-

Sir,
The question is about "angular resolution " and not resolving power.
As per wikipedia and all other official physics sites the formula is the inverse of the one that you used here .Therefore the angular magnification must be inversely proportional to diameter...Sorry if I am wrong.

Sir even I feel so...
The answer ought to be
(2) large focal length and small Diameter

For telescope, angular magnification = f₀/f_E
So, focal length of objective lens should be large.
Angular resolution = D/1.22λ should be large.
So, objective should have large focal length (f₀) and large diameter D.

Hence, option (3) is correct.