Which condition requires a vessel to display navigation lights?

A vessel must display navigation lights in foggy conditions or at night to ensure visibility and safety on the water. These lights help to indicate the size, direction, and type of the vessel to other boats, which is crucial during times of limited visibility or darkness. Navigation lights include specific colors and placements that signify various aspects of a boat's orientation and activities—for instance, a red light on the port side and a green light on the starboard side.

The other circumstances do not necessitate the use of navigation lights. Daylight conditions provide ample visibility, so lights are typically not required. When a vessel is anchored, it may need to display an anchor light, which is a specific type of navigation light, but not all navigation lights. Additionally, the mere act of traveling with other boats does not automatically require navigation lights unless it is nighttime or visibility is poor, such as in fog. Thus, the correct answer emphasizes the importance of using navigation lights to prevent collisions and ensure safe navigation in low visibility conditions.