Step 1: Understanding the Concept
Lactose is the milk sugar, a disaccharide.
Step 2: Statement I
On hydrolysis lactose breaks into one glucose and one galactose molecule. Statement I is correct.
Step 3: Statement II
Galactose is converted into glucose derivatives in the liver and enters glycolysis, so it can serve as a respiratory substrate like glucose. Statement II is correct.
Step 4: Compare the options
Both statements are correct.
Final Answer:
Both statements are correct.
\[ \boxed{\text{(A) }\text{Both statement I and statement II are correct.}} \]