Answer: A
The acetamido group (stronger director) places NOX2 ortho to itself, i.e. at position 2 of 4-methylacetanilide, which is meta to CHX3. Hydrolysis gives 4-methyl-2-nitroaniline; diazotisation and HX3POX2 remove the nitrogen, leaving CHX3 and NOX2 in a 1,3-relationship: 3-nitrotoluene.