I made three diagrams based on possible placements of T _ _ W.
_ T _ _ W _ _ 1 2 3 4 5 6 7
_ _ T _ _ W _ 1 2 3 4 5 6 7
_ _ _ T _ _ W 1 2 3 4 5 6 7
If U is to be in chapter three, we know that we must use either diagram 1 or diagram 3. We can also place X next to U.
_ T U X W _ _ 1 2 3 4 5 6 7
_ X U T _ _ W 1 2 3 4 5 6 7
If you'll notice, the problem with the first diagram is that it forces W and X into adjacent chapters, which is against the rules. This is why E cannot be true. We must continue with diagram 3. Now we only have to separate S and Z, forcing one of them into chapter 1.
S/Z X U T _ _ W 1 2 3 4 5 6 7
R can be placed in either 5 or 6, making B the correct answer.