Toni Morrison's is a possessive noun that is functioning as an adjective in the sentence. Big deal that the possessive noun--and a proper one at that--is functioning as an adjective! Its nominativeness is so clearly evident as the referent for her that the sentence should be considered to be both grammatical and correct.

I agree that the sentence should not have been included on the test, but I remain adamant that the sentence is correct--a pox on the rule!