Step 1: Understanding the Concept:
Chromatin, a complex of DNA and protein within the nucleus, exists as euchromatin and heterochromatin. These forms differ in condensation level and transcriptional activity.
Step 2: Detailed Explanation:
Evaluating statements about Euchromatin:
(A) Highly condensed: Incorrect. Euchromatin is less condensed. Heterochromatin is highly condensed.
(B) Associated with active transcription: Correct. Euchromatin's open structure enables transcription.
(C) Found outside nucleus only: Incorrect. Euchromatin is located inside the nucleus.
(D) Does not replicate during S phase: Incorrect. All DNA replicates during S phase; euchromatin replicates early.
Step 3: Final Answer:
Euchromatin is associated with active transcription.