The block of wood would float higher with the iron suspended below it rather than placed on top of it.
Work Step by Step
Say that the iron-and-wood system weighs w newtons. Because it floats, it displaces the same volume V of water (of weight w) whether the iron is on the top or on the bottom. When the iron is placed on top, a volume V of wood is underwater. When the iron is suspended beneath, it helps displaces some water, so less wood is in the water, which means it floats higher than it did before.