The correct option is
A True
Hg2++2I−→HgI2↓
Scarlet red ppt
The precipitate dissolves in excess reagent, when colourless tetraiodomecurate (II) ions are formed.
HgI2+2I−⟶[HgI4]2− or Hgl2+2KI→K2[HgI4]
soluble
An alkaline solution of potassium teraiodomercurate (II) serves as a selective and sensitive reagent for ammonium ions ( Nessler's reagent )