Final answer:
Upon reaction with NaBH4, formaldehyde is reduced to form methanol, which is the simplest alcohol.
Step-by-step explanation:
Formaldehyde reacts with NaBH4 (sodium borohydride) in ethanol to form the alcohol product. The reaction of formaldehyde implies the reduction of an aldehyde to an alcohol. Since formaldehyde (H2C=O) is the simplest aldehyde, upon reduction it gives the simplest alcohol. Given the options, the correct answer is methanol (CH3OH), also known as methyl alcohol.