The correct option is B False
Answer is B.
The light reaching you from the portion of the pencil inside water seems to come from a different direction, compared to the part above water. This makes the pencil appear to be displaced at the interface.
It appears that when traveling obliquely from one medium to another, the direction of propagation of light in the second medium changes. Due to refraction the immersed part of the pencil appears to be raised and short.
Hence, the statement is false.