1 is CORRECT. Entering 1's into a K-map in those minterm cells specified by the MUX data inputs leads, after simplifying, to the result F(x,y,z) = z. Here is the K-Map:
____x____ _____________________ | 0| 2| 6| 4| | | | | | |____|____|____|____| || 1| 3| 7| 5| z|| 1 | 1 | 1 | 1 | <- Group this cell of four ||____|____|____|____| to obtain F = z _________ y