What happens to a liquid with a specific gravity of 0.7 when placed in water?

A liquid with a specific gravity of 0.7 is less dense than water, which has a specific gravity of 1. When a substance's specific gravity is less than that of water, it will naturally float on the surface when placed into water. This is due to the principle of buoyancy, where the upward force exerted by the fluid is greater than the weight of the object. Therefore, the correct answer indicates that the liquid will float on top of the water.

The other options do not apply because a specific gravity greater than 1 would result in sinking, mixing with water would suggest complete integration rather than isolation, and dissolving would imply a chemical change that is not relevant to the scenario of simply displacing water based on density.