I think that both 1 and 2 can happen depending on what your application is like.
Your model could broadcast change events, that activities or fragmenets can then react to updating the UI so to speak.
Or you might have a really simple model, or perhaps a transient model that is passed from activity to activity. In which case your might be more likely to just update the information in that model and then command the UI to refresh, passing the model along with it.
I'm a bit out of touch so i think both are fine as long as your clear and consistent. When i start using Fragments i might read up on whats the best way to react to changes in the model, they might prefere broadcast changes over direct calls to update/refresh.