Step 1: Understanding the Concept
These statements are objections to the root pressure theory, which needs positive pressure in the xylem.
Step 2: Statement I
Under normal conditions, transpiration pulls on the water column, so the sap is under tension. It has negative hydrostatic pressure, so Statement (I) is correct.
Step 3: Statement II
Xylem sap is a very dilute mineral solution, so its osmotic pressure is low, not high. Statement (II) is incorrect.
Final Answer:
Statement I is correct but Statement II is incorrect.
\[ \boxed{\text{(C) }\text{Statement (I) is correct but Statement (II) is incorrect.}} \]