Option 1 is the correct answer because it correctly acknowledges that both the assertion (A) and the reason (R) are individually true, and R is the correct explanation of A.

The assertion states that the amount of moisture in the atmosphere is related to latitude, which is true as the evaporative capacity of the atmosphere is higher near the equator due to higher temperatures, resulting in a higher amount of atmospheric moisture there.

The reason states that the capacity to hold moisture in the form of water vapour is related to temperature. This is true because warmer air can hold more moisture than cooler air. Therefore, areas with higher temperatures, like those near the equator (equating to latitude), have a higher capacity to hold moisture, making the reason the correct explanation of the assertion.

Options 2, 3 and 4 are incorrect because they either misrepresent the individual truth of the assertion and reason or misstate the relation between the two.