A small stone is inside a ice block which floats in water. When the ice fully melts the level water

Let Vs and Vi be the volumes of stone and ice respectively, ρs and ρi be the densities of stone and ice respectively. Also, let ρw and Vw be the density of water and volume of displaced water respectively.By law of floatation, When the ice melts into water, volume of water and volume of water displaced is the stone Since total volume of displaced water = Vs, which is less than Vw.Hence option (2) is right.