The correct option is B BAETUY
In the given code, 'REACTION' is coded as 'RAETCOIN'.
So, the first and the last letters remain the same.
The other letters interchange their positions in pairs of two:
EA→AECT→TCIO→OI
So, according to the rule, the first and last letters of the word 'BEAUTY' will remain the same in the coded word also.
The other letters will be replaced in pairs as:
EA→AEUT→TU
So, Henry will code the word 'BEAUTY' as 'BAETUY'.