A boat full of scrap iron is floating on water in a lake. If all the iron is dropped into the water, the level of water will

If something is submerged in water, it will displace an amount of water equal to its volume. If something is floating in water, it will displace an amount of water equal to its weight.

Initially, when iron and boat are floating, water displaced is equal to volume occupied by weight of iron and weight of boat.
Now, iron is dropped in water, but boat is still floating.
so, Volume of water displaced will be equal to volume occupied by the weight of boat and volume of iron.
As density is higher for iron, its volume will be less than its mass or weight. So, Volume of water displaced when iron is dropped is less than when boat is filled with iron.

The object which is denser than water displaces less water when submerged, than when it is floating.

So, water level will fall down when iron is dumped in water.