Correct option is C
Sentence I:
'Fine' means healthy
'Fine' means the amount paid for punishment
These are two different meanings of the same word “fine.”
Such words are spelled and pronounced the same but have different meanings — they are called homonyms (or more specifically, homographs).
Sentence II:
In the above sentences, the word 'Fine' is the example for 'Homophone'.
Incorrect, because homophones are words that sound the same but have different spellings and meanings (e.g., pair / pear, right / write).
Correct Answer: C
I is correct, II is incorrect



