The correct answer is option 'B', which states that the current ICBO flows in the collector and base leads. Let's understand why this is the correct answer.

- ICBO stands for Collector-Base Leakage Current. It is the current that flows between the collector and base of a bipolar junction transistor (BJT) when the emitter is open-circuited.
- When the emitter-base junction is forward biased, it allows a large current to flow through the transistor, which is known as the collector current (IC). This current is controlled by the base current (IB) and the transistor's current gain (hFE).
- However, even when the emitter-base junction is reverse biased or open-circuited, there is still a small amount of current that flows between the collector and base. This current is called the collector-base leakage current (ICBO).
- The ICBO is typically very small compared to the forward bias current, but it can still have an impact on the overall performance of the transistor.
- The ICBO flows in the collector and base leads because it represents the leakage current that bypasses the emitter-base junction and directly flows between the collector and base terminals.
- This leakage current can cause issues such as increased power dissipation, reduced signal gain, and temperature rise in the transistor.
- Therefore, it is important to consider the ICBO value when selecting a transistor for a specific application and ensure that it is within acceptable limits.
- By choosing a transistor with a lower ICBO value, the leakage current can be minimized, leading to improved overall performance and reliability of the circuit.

In summary, the correct answer is option 'B' because the collector-base leakage current (ICBO) flows in the collector and base leads of a bipolar junction transistor.