Correct option is D
Statement I is false because a dichotomous variable is one that has only two categories or levels. For example, a "yes" or "no" response, "male" or "female" gender classification, etc., are dichotomous. It does not have more than two categories.
Statement II is true as a nominal variable is a type of variable that can have two or more categories without any intrinsic ordering. Examples include variables like nationality, hair color, or types of fruit. These categories are distinct and have no specific order.