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The correct answer is option 3 - Both 1 and 2.
Statement 1 states that the Gandhara art of the Peshawar Valley is known for some of the finest sculptures made in dark grey schist. This statement is correct. Gandhara art was a prominent art form during the Kushana period, which flourished in the region of present-day Pakistan and Afghanistan. The sculptures of Gandhara art were made using dark grey schist and were highly renowned for their intricate details and realistic depiction of human figures.
Statement 2 states that the Kushanas were the first Indian kings to have portraits of themselves made in their shrines. This statement is also correct. The Kushanas were known for their patronage of art and architecture. They were one of the first Indian dynasties to introduce the concept of royal portraits in their shrines. These portraits were often sculpted or painted and served as a symbol of the king`s power and authority.
In conclusion, both statements 1 and 2 are correct. The Gandhara art of the Peshawar Valley is indeed known for sculptures made in dark grey schist, and the Kushanas were the first Indian kings to have portraits of themselves made in their shrines.