Do you think the oil dissolved in the water? Why do you think so?

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Hint: The answer to the given problem lies in the concept of density. The density of substance is defined as the mass per unit volume or mass divided by the volume. The density of various substances vary to a very great extent. Osmium is the densest naturally occurring material on earth. Graphene aerogel is the least dense material as well.

Complete answer:
The density of water in liquid state is $1g/c{m^3}$ while the density of vegetable oil is around $0.93g/c{m^3}$ . This clearly indicates that the density of the oil is less than that of water.
Thus, the less dense liquid always floats on the surface of the highly dense liquid and the highly dense liquid stays beneath.
From the above discussion we can conclude that oil and water are immiscible liquids and because the density of oil is less than that of the water, the oil floats on the water surface.

The oil and water are immiscible liquids. The water contains hydrogen bonds and is polar in nature while the oil does not have any polar parts. To get dissolved in water oil needs to break some hydrogen bonds which it fails to do and hence both the liquids remains separated, i.e. immiscible