Step through it iteratively...
Customer Obj1= new Customer();
One new object created, referenced by Obj1
Customer Obj2= new Customer();
A second object created, referenced by Obj2
Customer Obj3= custObj2;
Obj3, a reference variable, refers to custObj2 (which doesn't exist in this set of data, we'll assume it was created earlier?)
Obj3= Obj1;
Obj3 is re-assigned to point at Obj1.
In the end you have the three references, Obj1, Obj2, and Obj3 as well as 2 objects, (first two statements) and finally an ambiguous custObj2... if you meant to type Obj2 then ignore that part :)
custObj2there?2? The answer is below :)