You are in a boat, and the boat is in a pool. There is a rock in the boat. You throw the rock overboard, and it sinks to the bottom of the pool.
What happens to the water level?
The water level goes down.
Proof
The rock is currently displacing the amount of water equal to its mass. When it is dropped to the bottom, it is only displacing the amount of water equal to its volume.
It is more dense than water, so the amount of water displaced by its volume is less than the amount of water displaced by its mass.
Therefore less water is displaced after the rock is thrown overboard, and hence the water level goes down.