Answer: B. The stem specifies "to study the regulation of that gene during development" — this maps directly and exclusively to purpose (i): normal physiology and development. Disease models require disease-specific gene alterations, and vaccine safety testing is a separate application (NCERT Class 12 Biology Chapter 10, pages 183–184).
Why A is wrong: The question explicitly states the purpose is to study gene regulation during development, not disease. Disease models would require disease-causing or disease-associated gene constructs.
Why C is wrong: While transgenic mice CAN serve multiple purposes, the stem's stated goal ('regulation during development') restricts this to purpose (i) only. Adding (ii) requires a disease-associated gene.
Why D is wrong: All three purposes exist for transgenic animals in general, but the stem defines a single specific application (developmental gene regulation), which maps only to (i).