question is saying about the 2-word length and yes it has clearly mentioned that it is the relative mode of addressing.
relative addressing is just for displacement means it transfers the control to its effective address.
example: jump, -24 ,
+----+ ------------------------------+
| jump | offset |
+----+ ------------------------------+
S: jump
S+1: -24 here it is given that K = s+1 , while excuting this instruction pc= k+1;
(Effective PC address = next instruction address + offset, offset may be negative)
and it's given that effective address (address, where the operand is present ) is P.
so, p = pc +M(s+1)
=( k +1) +M(k)
=(s+1+1) + M(k)
so, (S+2) + M[K] option D