Answer
When the ice cube is floating, the buoyant force is equal to the weight of ice cube, but since the buoyant force is equal to weight of water displaced by the submerged portion of the ice cub, the floating ice cube displaces its own weight in water. When the ice cube melts, it turns into its own weight in form of water, thereby leaving the overall water level unchanged.
The water level will rise because the air will escape when ice melt. Earlier both hollow ice cube and trapped air were displacing water.
Work Step by Step
When the ice cube is floating, the buoyant force is equal to the weight of ice cube, but since the buoyant force is equal to weight of water displaced by the submerged portion of the ice cub, the floating ice cube displaces its own weight in water. When the ice cube melts, it turns into its own weight in form of water, thereby leaving the overall water level unchanged.
The water level will rise because the air will escape when ice melt. Earlier both hollow ice cube and trapped air were displacing water.