I like both tea and coffee but prefer the latter
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The correct answer is option 2, i.e., latter.
The sentence suggests that the blank must contain a word that refers to the second noun.
Let's look at the meanings of the options:
later- at a time in the near future; soon or afterwards.
latter- denoting the second or second mentioned of two people or things.
least- smallest in amount, extent, or significance.
last- coming after all others in time or order; final.
In sentences where two things are mentioned, the first is referred to by the adjective 'former'; while the second thing is referred to by the adjective 'latter'.
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