Answer:
B
Explanation:
An inscribed angle is basically the angle formed at the intersection between two chords on the circle (can't be in the middle of the circle; see attachment).
The intersection point is also the vertex of the inscribed angle. And since the intersection is on the circle, then the vertex is on the circle, making Statement 1 correct. Then we can eliminate A and D because they don't include 1.
Comparing B and C, we need to look to see if Statement 3 is correct. If it is, we choose B and if not, we choose C.
Based on the definition, the sides of an inscribed angle are, in fact, chords of a circle. So, Statement 3 is correct.
The answer is B.
Hope this helps!