Here both the statements are true.
But as mentioned in the solution, reason is not the correct explanation for the asssertion.
Then you might ask what exactly is the reason.Here it is,
The simple answer is that in an elastic collision (for objects >> in mass than typical molecules) energy moves from kinetic to potential then back to kinetic as long as the "elastic limits" of the materials are not exceeded. In other words, as long as they act like springs.
Hope you understand it.