Answer
The index of refraction of material 2 is greater than the index of refraction of water.
Work Step by Step
We can use Snell's law to help us understand this situation:
$n_w~sin~\theta_2 = n_i~sin~\theta_1$
In this equation:
$n_w$ is the index of refraction of water
$n_i$ is the index of refraction of the material
If the refracted angle $\theta_2$ is greater than the incident angle $\theta_1$, then the index of refraction of water is less than index of refraction of the material.
From the graph, we can see that the refracted angle $\theta_2$ is greater than the incident angle $\theta_1$.
Therefore, the index of refraction of material 2 is greater than the index of refraction of water.
