Step 1: Concept
Solve the differential equation $\frac{dy}{dx} = -\frac{y}{x}$ using separation of variables.
Step 2: Meaning
$\frac{dy}{y} = -\frac{dx}{x} \implies \log y = -\log x + \log c \implies xy = c$.
Step 3: Analysis
Use the condition $y(1) = 2$: $(1)(2) = c \implies c = 2$. The solution is $xy = 2$ or $y = 2/x$.
Step 4: Conclusion
For $x=3$, $y(3) = 2/3$.
Final Answer: (C)