Iron nails undergo a displacement reaction when immersed in a copper sulphate solution. Iron (Fe) replaces copper (Cu) in copper sulphate \((CuSO_4)\) because iron is more reactive. The reaction is:\[\text{Fe} (s) + \text{CuSO}_4 (aq) \rightarrow \text{FeSO}_4 (aq) + \text{Cu} (s)\]Copper metal is released from the solution and appears as a reddish-brown solid at the container's base, while iron(II) sulphate forms in solution. The color change is due to the formation of reddish-brown copper metal. Therefore, the correct answer is (D) Reddish brown.