The correct answer is B. The reduction in GM (metacentric height) due to free surface effect is calculated using the formula: Reduction in GM = (I / (ρ * V)) - (P / (2 * ρ * V)) Where: I = moment of inertia of the free surface ρ = density of the liquid V = volume of the liquid Given: Vessel displacement = 728 tons Vessel dimensions = 138' L x 31' B The formula indicates that the reduction in GM is directly proportional to the moment of inertia of the free surface (I) and inversely proportional to the volume of the liquid (V). Therefore, the larger the free surface area and the smaller the volume of the liquid, the greater the reduction in GM.