The correct answer is:
When one of the factors is negative and one is positive.
Explanation:
Multiplying two positive numbers would result in a positive answer that is larger than both of the factors.
Multiplying two negative numbers would result in a positive answer; this would by definition be larger than both of the factors.
Multiplying a positive by a negative number results in a negative number, and it would be a negative number that is farther away from zero than the negative factor. Since the product is negative, it is smaller than the positive factor; since it is farther from zero than the negative factor, it is smaller than the negative factor.