Step 1: Finding characteristic equation.
Step 2: Finding eigenvalues. - The only eigenvalue is \( \lambda = 1 \) with algebraic multiplicity 3. - Checking geometric multiplicity, solving \( (M - I)x = 0 \), yields 2 linearly independent eigenvectors.
Step 3: Selecting the correct option. Since geometric multiplicity is 2, the correct answer is (C) 2.