Correct Option
Both statements are correct. The phenomena described in both statements are due to the refraction of light at the interface between two media (water and air).
Statement 1: When an observer looks at a coin submerged in water from above, light rays originating from the coin travel from water (denser medium) to air (rarer medium). As light passes from a denser to a rarer medium, it bends away from the normal. This refraction causes the light rays to appear to originate from a point closer to the surface, making the coin seem shallower than its actual depth.
Statement 2: When an observer under water looks at a coin located above the water surface, light rays from the coin travel from air (rarer medium) to water (denser medium). As light passes from a rarer to a denser medium, it bends towards the normal. This refraction causes the light rays to appear to originate from a point at a higher level, making the coin seem elevated from its actual position.
Incorrect Options
Options (b), (c), and (d) are incorrect because both statements 1 and 2 accurately describe the effects of light refraction at the air-water interface, making option (a) the correct choice.