When does free surface exist in a vessel?

Free surface exists in a vessel when the surface of the liquid is free to move. This phenomenon occurs when liquid is contained in a tank or space that is not completely filled, allowing the liquid to shift and affect the vessel's stability. The free surface effect can lead to a reduction in the vessel's metacentric height and stability, particularly when the vessel heels.

The presence of free surface can introduce an additional moment that can exacerbate the angle of heel during heeling conditions, thereby impacting the stability of the vessel significantly. It is crucial for mariners to account for free surfaces when calculating stability to ensure the vessel remains safe during operations.

The other options do not correctly define the conditions for free surface. For instance, a stationary liquid does not imply free surface exists, and the presence of free surface is not limited to specific cargo types like dry bulk or confined to a vessel being at anchor. Free surface effects can occur whenever a liquid is present in partially filled tanks, regardless of the vessel's operational status or cargo type.