In the question below, two statements are given with one blank each, which must be filled in with the same word. Following the statements are five words. Choose the most appropriate word which could fill in both the blanks to make both the statements grammatically and contextually correct.
I. His refusal to ________ on the key terms of the contract led to the breakdown of negotiations.
II. Under pressure, he refused to ________ and stood firm on his decision.

The correct option is Yield.

Let us analyze the contextual meaning of both sentences step-by-step to understand why "Yield" is the most appropriate word to fill both blanks:
1. Sentence I: "His refusal to ________ on the key terms of the contract led to the breakdown of negotiations."
Here, we need a verb that refers to conceding, compromising, or giving in during a negotiation. In business or legal contexts, to yield means to submit, compromise, or give way under pressure or argument.
2. Sentence II: "Under pressure, he refused to ________ and stood firm on his decision."
The phrase "stood firm on his decision" indicates that he did not surrender, back down, or compromise. Therefore, the blank must be filled with a word that means to submit, surrender, or capitulate. The verb yield perfectly fits this definition as it means to surrender or submit to force or pressure.

Let us evaluate why other options are incorrect:
- Negotiate: In Sentence I, "refusal to negotiate" makes sense. However, in Sentence II, "refused to negotiate" does not align logically with standing firm under pressure on a decision already made.
- Demonstrate: This means to show or prove, which does not fit contextually in either sentence.
- Transform: This means to change in form or appearance, which is grammatically and contextually incorrect here.
- Give: While "give" can sometimes be used in the phrasal verb "give in" to mean submit, the single word "give" does not fit Sentence I ("refusal to give on the key terms" is grammatically awkward, whereas "yield on" is correct).

Thus, the word yield is grammatically correct and contextually fitting for both sentences.