A piece of ice, with a stone frozen inside it, is floating in water contained in a beaker. When the ice melts, the level of water in the beaker

Let the mass of ice be $m_1$ and the mass of stone be $m_2$. The mass of the displaced water is equal to $\left(m_1+m_2\right).$ If $\rho$ is the density of water, the volume of water displaced is
$V=\left(m_1+m_2\right)/\rho$
When the ice melts, additional volume of water obtained is $m_1/\rho$. The stone sinks in water, and displaces a volume of water equal to its own volume, which is $m_2/{\rho }_s$ where ${\rho }_s$ is the density of stone. Thus the total volume of extra water is $V^{\text{'}}=\frac{m_1}{\rho }+\frac{m_2}{{\rho }_s}$

Since ${\rho }_s>\rho ,\frac{1}{{\rho }_s}<\frac{1}{\rho }$
$\therefore V^{\text{'}}<V$. Therefore, level of water in beaker decreases.