Iodine is nonpolar, and thus the water does not dissolve the iodine because water is polar.
What is polar and nonpolar substance ?
Polar molecules occur when there is an electronegativity difference between the bonded atoms.
Nonpolar molecules occur when electrons are shared equal between atoms of a diatomic molecule or when polar bonds in a larger molecule cancel each other out.
Hence , Iodine is nonpolar, and thus the water does not dissolve the iodine because water is polar.
Learn more about polarity here ;
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