The correct answer is "3. Both increase"
In fact, the frequency of a vibrating string is given by
[tex]f= \frac{1}{2L} \sqrt{ \frac{T}{\mu} } [/tex]
where L is the length of hte string, T the tension and [tex]\mu[/tex] the linear mass density.
We can see that string is made shorter, L decreases, so the frequency f increases. And since the pitch has the same behaviour of the frequency, it increases as well.