The correct response is:
A. The water will stop steaming.
When the red-hot horseshoe is placed in the cold water, it transfers heat (energy) to the water. As the hot horseshoe cools down and the water absorbs heat, the steam produced from the boiling water indicates that heat is still being transferred. Once the horseshoe has cooled sufficiently and is no longer transferring heat to the water, the steam will stop, indicating that the energy transfer has ceased.