option 2 is correct one .....control address register is one which tells the address of that micro-programmed signals which has to be generated .......that all are present in CONTROL MEMOERY as "WORDS"...(just like binary bits)
say control address register is 10 bits means 2^10 entries are there in CONTROL MEMORY....now we can select any one word and gve it as output.....
the width of word in CONTROL MEMORY depends on type of micro-programmed control
1)Horizontal (for every signal we use one seperte bit)
2)Vertical(for signals we can use decoder to reduce the number of bits required )