1 and 2 will be printed, but there will be no return from the wait call because no other thread will notify the main thread, so 3 will never be printed. The program is essentially frozen at line 11.
A is incorrect; IllegalMonitorStateException is an unchecked exception so it doesn't have to be dealt with explicitly.
B and C are incorrect; 3 will never be printed, since this program will never terminate because it will wait forever.