**Explanation:**

When a transformer is at no load, it means that there is no load connected to its secondary winding. In this condition, the primary winding is only connected to the power supply and there is no current flowing through the secondary winding.

In a transformer, the primary winding and the secondary winding are magnetically coupled but electrically isolated. The primary winding is connected to the power supply, which creates a magnetic field that induces a voltage in the secondary winding. This induced voltage is proportional to the turns ratio of the transformer.

**Inductive Reactance:**

When a transformer is at no load, the secondary winding behaves like an inductive reactor. An inductive reactor is a component that has inductance and can store and release energy in the form of a magnetic field. The inductive reactance depends on the frequency of the power supply and the inductance of the winding.

**Power Factor:**

Power factor is a measure of how effectively electrical power is being used in a circuit. It is defined as the ratio of real power (measured in watts) to the apparent power (measured in volt-amperes). A power factor of 1 means that the circuit is purely resistive, while a power factor less than 1 indicates the presence of reactive components such as inductors or capacitors.

**No Load Condition:**

In a transformer at no load, there is no load connected to the secondary winding, which means there is no real power being consumed. Therefore, the power factor is 0 since there is no real power to divide by the apparent power.

**Lagging and Leading Reactive Power:**

Reactive power can be either lagging or leading, depending on the type of reactive component in the circuit. Inductive components, such as inductors, have lagging reactive power, while capacitive components have leading reactive power.

**Correct Answer:**

In the given options, option B states that the transformer at no load behaves like an inductive reactor at 0.2 lagging. This means that the transformer at no load has an inductive reactance and the reactive power is lagging by 0.2 power factor angle.

This is the correct answer because when a transformer is at no load, the secondary winding behaves like an inductive reactor due to the presence of inductance in the winding. The lagging reactive power indicates that the transformer is consuming reactive power from the power supply, which is characteristic of an inductive component.

Therefore, option B is the correct answer.