In a balanced binary search tree (e.g., AVL or Red-Black tree):
- The height is $O(\log n)$ due to balancing properties.
- Insertion involves traversing from root to leaf to find the insertion point, which takes $O(\log n)$.
- After insertion, rebalancing (rotations) takes $O(\log n)$ in worst case.
Thus, total time complexity is $O(\log n)$.
Option (1) is correct.