Step 1: Energy-free approach:
Take the net force on the particle: the normal reaction's horizontal part provides the centripetal force and its vertical part balances weight.
Step 2: Geometry:
Normal reaction is at angle $\theta$ to the vertical, where $\tan\theta = h/r$ is the slope of the cone wall. Then $\dfrac{mv^2/r}{mg} = \tan\theta = \dfrac hr$.
Step 3: Evaluate:
$v^2 = gh$, so $h = 0.25/10 = 0.025$ m $= 2.5$ cm, option (B).
Final Answer:
The height is v squared over g, equal to 2.5 cm.
\[ \boxed{\text{(B) }2.5\ \text{cm}} \]