**Core Concept**
Desmopressin is a synthetic analogue of vasopressin, specifically designed to mimic its action on the V2 receptors in the kidneys. This receptor selectivity is crucial for its therapeutic effects in treating conditions like diabetes insipidus and nocturnal enuresis, where it promotes water reabsorption and increases urine concentration.

**Why the Correct Answer is Right**
Desmopressin acts by binding to the V2 receptors in the collecting ducts of the kidneys, triggering a cascade of intracellular signaling events that increase the expression of aquaporin-2 water channels. This results in increased water reabsorption and a concomitant decrease in urine production. The V2 receptor selectivity of desmopressin minimizes its vasopressor effects, which are mediated by V1 receptors, thereby reducing the risk of hypertension and other cardiovascular complications.

**Why Each Wrong Option is Incorrect**
**Option A:** Lypressin is another synthetic analogue of vasopressin, but it has a lower affinity for the V2 receptors and a higher affinity for the V1 receptors, making it a less selective agonist.

**Option C:** Terlipressin is a prodrug of vasopressin, which is metabolized to the active compound after administration. While it does have some V2 receptor activity, its primary action is as a V1 receptor agonist, making it more suitable for treating conditions like esophageal variceal bleeding.

**Clinical Pearl / High-Yield Fact**
When selecting a vasopressin analogue for treating conditions like diabetes insipidus, it's essential to choose a drug with V2 receptor selectivity to minimize the risk of cardiovascular side effects.

**Correct Answer:**
✓ Correct Answer: B. Desmopressin