The correct answer is: B. each module performs a specific function and can be developed relatively independently by programmers.
A system design is said to be functionally modular if each module performs a specific function and can be developed relatively independently by programmers. This means that the system is divided into smaller, more manageable units, each of which is responsible for a specific task. This makes the system easier to understand, design, and implement. It also makes it easier to test and debug the system, and to make changes to it later.
Option A is incorrect because it is not necessary for a system to be able to handle all the functions of the application in order to be considered functionally modular. A system can be functionally modular even if it does not have all the features that a user might want.
Option C is incorrect because it is not necessary for a system to make extensive use of function keys in order to be considered functionally modular. A system can be functionally modular even if it does not have any function keys.
Option D is incorrect because it is not necessary for a system to be developed using structured programming through COBOL or PASCAL in order to be considered functionally modular. A system can be functionally modular even if it is developed using a different programming language.
Option E is incorrect because it is not the only option that is correct. The correct answer is option B.