The correct answer is option 3, which states that both statement 1 and statement 2 are correct.

Statement 1 states that the most important idea in Jainism is that the entire world is animated and that even inanimate objects such as stones, rocks, and water have life. This is an accurate description of the concept of animism in Jainism, which believes that all living beings, including plants and animals, as well as non-living objects, possess a soul.

Statement 2 states that asceticism and penance are required to free oneself from the cycle of Karma. This is also true in Jainism, as the religion emphasizes the importance of self-control and discipline in order to purify the soul from negative karma. Jain monks and nuns practice extreme austerity, renounce worldly possessions, and follow strict rules of non-violence to attain liberation from the cycle of birth and death.

Therefore, both statements 1 and 2 accurately describe important beliefs and practices in Jainism.