How many String object..?

Question

Me and my friend was discussing on Strings and we stuck on this:

String str = \"ObjectOne\"+\"ObjectTwo\";

He says total three Object will

Answer 1

String str1 = "ObjectOne";
String str2 = "ObjectTwo";
str1 = str1+str2;

In above case three objects will be created.

But when you define like

String str = "ObjectOne"+"ObjectTwo";

then only one object will be created. Compiler optimizes it.