1) At the moment of being at the top, the piston will not only tend to push the penny up but will also descend at a faster rate at which the penny can reach in 'free fall', in that short distance. Therefore, at the highest point, the penny will lose contact with the piston. Therefore the correct answer is C.
2) To solve this problem we will apply the equations related to the simple harmonic movement, hence we have that the acceleration can be defined as
Where,
a = Acceleration
A = Amplitude
= Angular velocity
From a reference system in which the downward acceleration is negative due to the force of gravity we will have to
From the definition of frequency and angular velocity we have to
Therefore the maximum frequency for which the penny just barely remains in place for the full cycle is 2.5Hz