A wooden block with a coin placed on its top, floats in water as shown in figure. The distance $l$ and h are shown here. After some time the coin falls into the water. Then:

As the block moves up with the fall of coin $l$ decreases. 

When coin falls in water wood goes up, displaced volume decreases and as coin has higher density so its volume is less and hence it doesn’t displace liquid much. 

Hence h will also decrease.