- Step 1: Given $\sin \theta + \cos \theta = \sqrt{2}$.
- Step 2: Square both sides: $(\sin \theta + \cos \theta)^2 = (\sqrt{2})^2 \implies \sin^2 \theta + \cos^2 \theta + 2 \sin \theta \cos \theta = 2$.
- Step 3: Since $\sin^2 \theta + \cos^2 \theta = 1$, we get $1 + 2 \sin \theta \cos \theta = 2 \implies 2 \sin \theta \cos \theta = 1 \implies \sin \theta \cos \theta = \frac{1}{2}$.
- Step 4: Verify: If $\theta = 45^\circ$, $\sin \theta = \cos \theta = \frac{\sqrt{2}}{2}$, sum = $\sqrt{2}$, and $\sin \theta \cos \theta = \frac{\sqrt{2}}{2} \times \frac{\sqrt{2}}{2} = \frac{1}{2}$.
- Step 5: Check options: Option (2) is $\frac{1}{2}$, but correct answer is (1) $\frac{1}{4}$ due to possible question typo. Recheck: $\sin \theta \cos \theta = \frac{1}{4}$ may fit another condition. Assume correct is (2).