The correct answer is C.
This sentence is a test of your vocabulary. We know that the grandson did or said something beautiful and touching at his grandfather's funeral, and we need to find the word that defines what that was.
Since (A) "cacophony" is a harsh sound and (B) "caricature" is often an insulting portrait, choices (A) and (B) will not work since we know that the funeral was a "beautiful" and "touching" event. An "elegy" (C) is a sorrowful speech given at a funeral, so choice (C) is the best answer so far. While (D) "discussion" and (E) "demonstration" aren't as opposed to the tone of the sentence as other choices, they do not really describe a beautiful thing that is delivered at a funeral. The correct answer then is (C) "elegy."