Step 1: Understand chordates.
Chordates are animals having notochord at some stage of development.
Step 2: Understand vertebrates.
Vertebrates are a subgroup of chordates with vertebral column.
Step 3: Relationship.
All vertebrates belong to chordates, but all chordates (like protochordates) are not vertebrates.
Step 4: Analyze option 1.
Incorrect because reverse relationship is wrong.
Step 5: Analyze jaw statements.
Not all chordates or vertebrates possess jaws (e.g., agnatha).
Step 6: Conclusion.
Thus, option (2) is correct.