Applying general pest-control logic:
Red cotton bug is a plant-surface pest, it feeds by piercing developing bolls and seeds while sitting on the plant itself, not underground. Because the insect's feeding site is entirely above ground, insecticide applied to the soil rarely reaches the pest in an effective concentration, effective management instead relies on spraying the plant canopy and bolls directly. This makes Statement (I), which recommends soil-applied insecticide as the control method, incorrect. For reproduction, the bug's life cycle is tied to the cotton plant rather than the surrounding soil, adults congregate and mate on bolls and stems, and eggs are laid in sheltered spots on the plant (in boll cracks, under bracts, or amid plant debris on the crop) rather than being deposited directly into or onto open soil. Since neither the control method nor the egg-laying site described matches the actual above-plant biology of the pest, both Statement (I) and Statement (II) are incorrect, confirming option (2).