The correct answer is C) 5.43 feet. The reduction in GM (metacentric height) due to free surface effect is calculated using the formula: Reduction in GM = (I/V) * W/Δ, where I is the moment of inertia of the free surface, V is the vessel's volume, W is the weight of the free surface, and Δ is the vessel's displacement. In this case, the moment of inertia of the free surface (I) is calculated as (42'L x 28'B^3)/12 = 82,944 ft^4. With a vessel displacement of 368 tons and a free surface weight of 36 tons, the reduction in GM is calculated as (82,944 ft^4/368 ft^3) * (36 tons/368 tons) = 5.43 feet, which matches the correct answer choice C. The other answer choices are incorrect because they do not accurately reflect the reduction in GM based on the given information.