Step 1: Subject.
"Oil and water" is a compound plural subject, so we need a plural verb.
Step 2: Checking options.
(A) do — correct plural verb.
(B) could — expresses possibility, not general truth.
(C) does — singular, incorrect.
(D) should — indicates advice, not a fact.
Step 3: Conclusion.
Correct answer is (A) do.
Identify the part of the sentence that contains a grammatical error:
Each of the boys have submitted their assignment on time.