How does the large amount of genetic variation observed in prokaryotes arise?

The question is incomplete as it does not have the option which are:

The mutation rate in prokaryotes is much higher than in eukaryotes. They have extremely short generation times and large populations. They can exchange DNA with many types of prokaryotes by way of horizontal gene transfer. They have a relatively small genome. The second and third answers are correct.

Answer:

The second and third answers are correct.

Explanation:

Prokaryotes are the organisms which were formed earlier than the eukaryotes on the Earth so they are simpler than the eukaryotes and contain small genetic material or the genome.

Although the genetic material is small, the small genetic material contains a large amount of genetic variation which could be the result of the earlier form of sexual reproduction in bacteria through horizontal transfer of genetic material through transformation, transduction and conjugation. This process introduces the variation in the genome of the prokaryotes.

Thus, the selected option is the correct answer.