Let’s understand the relationship:
- All Naughty and Studious people are Children (so both groups must lie within the Children set).
- Some children may be naughty, some studious, some both, and some neither.
Only Option (4) represents:
- A large circle "Children"
- Two intersecting circles "Naughty" and "Studious" inside it
- This allows for overlap (a child can be both Naughty and Studious), and also allows for children who are neither.