Salad dressing is a suspension & the oil & the particles gets settled when left undisturbed (2nd option.) Oil & water (the other particles) are immiscible, so it's a suspension.
Some salad dressings can be a colloid as well. But, the 2nd option suits better here.
Your answer is wrong because in a suspension, the particles are big & aren't informally distributed throughout the mixture. That's only in a solution/colloid. Suspensions have particles that are unevenly distributed & are big enough to scatter light until they settle down (Tyndall effect).