The correct statement is 'BiPredicate testEquality = (var x, var y) -> (x.equals(y));'. This is because the 'var' keyword can be used for both parameters when declaring a lambda expression, ensuring that both variables have their types inferred properly. Mixing 'var' with explicit types, omitting parentheses, or incorrectly grouping the variable declarations would result in syntax errors or invalid syntax for lambda expressions.