This is, of course, an unofficial question and this sentence is in fact written in a way that would not occur on the official GRE exam.

This portion "but it has also despoiled drama, the lyrics and the oration that are part of its inheritance." is not correct English. For this to be correct the appositive phrase "the lyrics and oration that are part of its inheritance" would need to clearly refer to drama. Of course it does not. In fact, that appositive phrase does not refer to anything in the sentence. There is nothing in this sentence that could be referred to by "the lyrics and oration."

Secondly, the use of "not only....but also" in this sentence is incorrect. To make this correct the sentence would have to have the "not only" come before the verb "is" and would have to remove the word "it". As in "The modern novel NOT ONLY IS the _____ of the epic, BUT ALSO HAS despoiled drama. The way it is written makes it very difficult to read.

So while this is not the GMAT and this is not Sentence Correction, it is important that sentences actually make sense so that we can grasp the logic of them and be able to apply that logic to filling in the blank(s) correctly. The five answer choices here are not difficult vocabulary. I would think that most test takers would know 4 or 5 of these 5 words very clearly.

So because the words are not difficult someone has tried to make a difficult sentence here in two ways: one of these two is legitimate to the GRE and the other is not.

1) A difficult word in the sentence rather than the answers is something the writers of the official GRE absolutely do! In this case the word is "despoil," which means "plunder" "to steal or violent remove valuables." This word absolutely fits the sentence. The modern novel has stolen lyrics and oration from the art form known as "drama" - think Greek dramas or Shakespeare: plenty of lyrics and oration to steal right?

So it is legitimate to give you a challenging word or words in the sentence rather than the answers.

2) Making a sentence that is impenetrable because it does not follow the rules of written English is NOT a legitimate tactic and this is where this question falls short.

Therefore, I would not use this particular question to study for the GRE!

Hope that helps