The correct option is C in unstable equilibrium
At present situation force of magnetic moment = →μ×→B=0
If it is disturbed from this position, the force that would develop would take it away from this current position and destabilize the current equilibrium. Hence it is at untstable equilibrium.
In stable equilibrium, the force developed on the system upon disturbing brings the system back to its original position. Here the opposite is the case.
In neutral equilibrium, upon being disturbed from the original position, the system attains a new equilibrium at the new position.