Final answer:
The correct answer is Option 1, which states that red dwarfs are smaller and less luminous than giant stars. Red dwarfs are more common, have a much smaller size, and emit significantly less light compared to giant stars.
Step-by-step explanation:
The relationship between red dwarfs and giant stars is best described by Option 1: Red dwarfs are smaller and less luminous than giant stars. Red dwarfs, like Ross 614B, are much smaller in size, with a diameter only about 1/10 that of the Sun and a mass approximately 1/12 that of the Sun. Despite their small size, red dwarfs are much denser, with an average density around 80 times that of the Sun. They emit far less light, with only 1/2000 of the Sun's luminosity, which makes them much fainter than giant stars. In the universe, stars with low mass and low luminosity like red dwarfs are actually much more common than their larger, more luminous counterparts such as giant stars.