Pv = nRT
n and R are constant since no air enters or escapes the balloon.

The process of squeezing the balloon is reversible but not adiabadic meaning that there is some non-zero heat transfer between your hands and the balloon wall and again from the balloon wall and the air. Though this variation will be several orders of magnitude too small to consider. So T can be assumed constant.

So the equation is

Pv = c

or that P = c/v which is not a straight line but instead a big curvy C. As volume approaches zero, pressure should approach infinity and as pressure approaches zero, volume should approach infinity. None of your answers are correct.

Your first answer is an excellent approximation if you consider that the balloon can not approach either infinite or zero pressure or volume. Though, it would be better if it was not linear.