The correct answer is Option 2.

Option 2 states: I-B, II-C, III-A, IV-D. This correctly matches:

I - WTO with B - Multilateral trade negotiation body, which aligns with the role of the World Trade Organization (WTO) as an entity that governs international trade.

II - IDA with C - Sanction of soft loans, which is accurate since the International Development Association (IDA) does provide soft loans to the world`s poorest countries.

III - IMF with A - Provides loans to address short-term balance of payment problems. This accurately represents the function of the International Monetary Fund (IMF), which provides loans to member countries facing balance of payments issues.

IV - IBRD with D - Facilitating lendings and borrowings for reconstruction and development, which correctly represents the role of the International Bank for Reconstruction and Development (IBRD), a part of the World Bank Group that provides loans for projects in developing countries.

The other options present incorrect matches between institutions and their functions.