According to Manusmriti, Endogamy refers to marriage:

Within the kin and caste group

The correct answer is Option (2) → Within the kin and caste group

According to Manusmriti, Endogamy refers to marriage within the kin and caste group.

Types of marriages per Manusmriti:

Endogamy refers to marriage within a unit - this could be a kin group, caste, or a group living in the same locality.
Exogamy refers to marriage outside the unit.
Polygyny is the practice of a man having several wives.
Polyandry is the practice of a woman having several husbands.