Option 1: Its potential energy decreases while kinetic energy increases.

When the swing rises to a certain height from its rest position, its potential energy increases while kinetic energy decreases. As the swing reaches its highest point, potential energy is maximum as the swing gains height and gravitational potential energy. At this point, the swing momentarily stops moving, resulting in zero kinetic energy. As the swing starts to descend, potential energy decreases while kinetic energy increases. This is because some of the potential energy is converted into kinetic energy as the swing gains speed while moving downwards.

Option 2: Its kinetic energy decreases while potential energy increases.

This option is correct. When the swing rises to a certain height from its rest position, its kinetic energy decreases while potential energy increases. As explained earlier, at the highest point, the swing momentarily stops, resulting in zero kinetic energy. Meanwhile, potential energy is at its maximum as the swing gains height and gravitational potential energy. As the swing starts to descend, potential energy decreases while kinetic energy increases.

Option 3: Both potential and kinetic energy decrease.

This option is incorrect as it suggests that both energies decrease. However, this contradicts the concept explained above.

Option 4: Both potential and kinetic energy increase.

This option is also incorrect