The correct answer is option 2, which states that statement II and III are correct. Now, let`s dissect each option to better understand why they are correct or incorrect.

Option 1 states that statements I and II are correct. However, this is incorrect. Statement I says that Kanishka introduced Buddhism to Kashmir in the 3rd century BC. This is incorrect because Kanishka was a Kushan emperor who ruled from the 1st century AD, not the 3rd century BC.

Option 2 states that statements II and III are correct, and this is the correct answer. Statement II states that the Huns occupied the Valley of Kashmir in the early 6th century AD, which is historically accurate. Statement III says that the Valley of Kashmir was ruled by the Ujjain Empire in the later part of the 6th century. This is also correct because the Ujjain Empire, also known as the Gurjara-Pratihara Empire, ruled over Kashmir during this time.

Option 3 states that only statement II is correct. This is incorrect because statement III is also correct. The Valley of Kashmir was ruled by the Ujjain Empire in the later part of the 6th century.

Option 4 states that only