Physics MC Question

The answer should be A, only statement 2 is correct.
The induced emf would make X at a higher potential than Y. Thus current flows from X to Y along the conducting wire (the external circuit) and from Y to X in the metal rod.
Since the rod is kept moving by a force F towards the right, the induced current that flow from Y to X in the rod would produce a force acting towards the left. The net force on the rod is therefore zero. (This can also be seen by using Lenz' Law).