In the Canada Deuterium Uranium (CANDU) reactor, a natural uranium-fuelled reactor, the function of moderator and coolant is performed by:

heavy water

The correct answer is option 3. heavy water.

In the Canada Deuterium Uranium (CANDU) reactor, both the function of moderator and coolant is performed by Heavy water.

Heavy water (deuterium oxide, \(D_2O\)) is used as both the moderator and the coolant in CANDU reactors. As a moderator, it slows down neutrons produced during nuclear fission to maintain the nuclear chain reaction. As a coolant, it transfers heat away from the reactor core to produce steam, which drives turbines to generate electricity.