Step 1: $μ = 1/\sqrt2$. Angle with surface = $45^\circ$, so $i = 45^\circ$.
Step 2: Critical angle $ic = \sin^-1(1/μ) = \sin^-1(\sqrt2)$ undefined. If $μ = \sqrt2$, $ic = 45^\circ$, then $i = ic$, ray grazes surface. Given answer is internal reflection.