The correct answer is OPTION 2 - that you lent me
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An Adjective Clause describes a noun and usually starts with words like who, which, that, whose, whom.
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In the sentence, "that you lent me" gives more information about "the book."
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It tells us which book is being talked about — the one you lent me.
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Therefore, "that you lent me" is the adjective clause.
Quick way to spot an Adjective Clause:
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It starts with a relative pronoun like who, which, or that.
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It directly describes a noun just before it.
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It can usually be removed without destroying the main structure of the sentence, but the extra detail will be lost.
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