Enthuware

Answer A shall be right, too.
I have thought Runnable is an interface, so there is no way to call 'new' on it.
Is that different with inner classes ?

Yes, option 1 is indeed a correct option. In this case, you are not instantiating Runnable interface but an anonymous class that implements Runnable interface. So the "new" is not really for Runnable, it is for that anonymous class.

As the Thread t = new Thread(a) which means 'a' should be Runnable object so how Option C will be correct as it defines a thread object. Please explain.

Is it that thread class also implements runnable so it is allowed?

Yes, Thread implements Runnable.