Calculate the refractive index of diamond with respect to water and determine in which medium light travels faster.

The refractive index of water ($n_w$) is 1.33.
The refractive index of diamond ($n_d$) is 2.42.

The speed of light in a medium is inversely proportional to its refractive index ($v = \frac{c}{n}$). A lower refractive index means light travels faster in that medium.

Since $n_w = 1.33$ is less than $n_d = 2.42$, light moves faster in water.

ii)

The refractive index of medium 2 with respect to medium 1 is given by $n_{21} = \frac{n_2}{n_1}$.
Here, $n_{diamond/water} = \frac{n_{diamond}}{n_{water}}$.

Rounding to two decimal places, we get 1.82.

i) Light moves faster in water.

ii) The refractive index of diamond with respect to water is $\boxed{\text{}1.82\text{}}$