MIxing of sand in water is an example of formation of a substance with a different identity. The sand sinks to the bottom in this mixture that's why it is a heterogenous mixture. A heterogenous mixture is a mixture that is not uniform in composition and it includes different substances like solid and liquid mixture.
While other options are may be homogenous mixture and diluted solution which have same composition and may also have same phase like liquid to liquid and powder to powder.
