Pointing to a photograph, a man says, “She is the daughter of the only son of my father's wife”. Who is the woman to the man?

Correct — D.
Rule: resolve the phrase from the innermost relation outward.

My father's wife = my mother
The only son of my mother = the man himself
The daughter of the man = his daughter → option (d).

Why the others are wrong

• (a)
  Sister — Sister skips a link. "The daughter of my father's wife" would be his sister, but this phrase first passes through "the only son", the man himself.
• (b)
  Cousin — A cousin is the child of a parent's sibling. The phrase names no uncle or aunt: it runs mother → her only son → his daughter.
• (c)
  Niece — A niece is a brother's or sister's daughter. The only son of the man's mother is the man himself, so the woman is his own child.

Photograph relation items pack a whole chain into one phrase. Resolve it from the innermost relation outward, replacing each piece with a person.

"My father's wife" is the speaker's mother. The only son of the speaker's mother must be the speaker himself, because he is a man and her son.

The phrase collapses to "the daughter of me", so the woman is his daughter.

Key facts

• "My father's wife" is read as "my mother".
• A male speaker who is his mother's only son has no brother.
• "Only son" rules out a brother, not a sister.

Common traps

• Stopping at "my father's wife's daughter" and answering Sister
• Treating "the only son" as a brother when the speaker is male

No directly related past PYQ was found.