Step 1: Understanding the Concept
We must check each statement about disaccharides separately.
Step 2: Statement I
Disaccharides such as maltose, sucrose and lactose are broken into monosaccharides in the small intestine by maltase, sucrase and lactase. The large intestine makes no such enzymes, so Statement I is incorrect.
Step 3: Statement II
Disaccharides have many hydroxyl groups that form hydrogen bonds with water, so they dissolve easily (like table sugar). Statement II is incorrect.
Final Answer:
Both statements are incorrect.
\[ \boxed{\text{(B) }\text{Both statement I and statement II are incorrect}} \]