In iBGP, by default, routes learned from an iBGP peer are not advertised to other iBGP peers (split horizon). Since R2 learned the route from eBGP, it should advertise it to R3. However, if R3 learned the route via iBGP from another source, it might not be advertised.
But the scenario implies R2 is not advertising to R3. The most common cause is that R2 has a route-map or filter blocking the advertisement, or the next-hop is unreachable from R3. However, given the information, the likely issue is that R2 does not have the route in its BGP table as best, or the next-hop is not reachable.
But the stem says R2 shows the prefix. The correct answer is that R2 is not advertising because the next-hop (10.1.1.1) is not reachable from R3, but that would affect R3's ability to use the route, not R2's advertisement. Actually, R2 will advertise to iBGP peers regardless of next-hop reachability on the receiver.
So the issue must be that R2 is not advertising due to a missing 'neighbor R3 activate' or a filter. The most plausible is that the network statement or redistribution is missing on R2 for the prefix? No, R2 has it. Let me re-read: R2's BGP table shows the prefix.
The missing route on R3 could be due to R2 not having the 'neighbor 10.1.1.3 activate' under the BGP process, or a route-map blocking. The stem does not mention any filters. The most common cause in such scenarios is that the BGP session between R2 and R3 is not configured to exchange prefixes (missing activate).