Detailed Explanation:

Displacement reactions occur when a more reactive metal displaces a less reactive metal from its salt solution.

Copper (Cu) is more reactive than silver (Ag) but less reactive than sodium (Na), iron (Fe), and magnesium (Mg). Therefore, Cu can displace Ag from AgNO₃ solution, forming Cu(NO₃)₂ and depositing metallic Ag.

In other options: Cu cannot displace Na (option 2), Ag cannot displace Fe (option 3), and Al cannot displace Mg (option 4) due to reactivity series order.