Answer : 2. "Both (A) and (B) are true and (B) is not the correct explanation of (A)"
Explanation :

The Sun and most of the stars change their position in the sky over time. But some stars always appear to be in the same place. An example is Polaris, also called the North Star, which always appears to be sitting directly overhead the North pole. It turns out that your latitude is the angle at which Polaris appears to sit above the horizon. The North Star has the advantage that it stays fixed in the sky - all night long. This North-star has two advantages, known since ancient times. First of all, it tells the direction of the accurate North. Secondly, it may in an easy way to tell your geographical latitude. Your Geographical Latitude = Height of North Star above the horizon. So, if you live in, say, Paris at 48 degrees North, Polaris will be 48 degrees above the northern horizon.