Final answer:
The correct impact of retrovirus insertion next to a cellular oncogene is the activation of oncogene transcription by the U3 sequence of the LTR, which can lead to cancerous growth.
Step-by-step explanation:
When a retrovirus inserts into the host genome next to a cellular oncogene, it can lead to the overexpression of the oncogene due to the transcriptional regulatory sequences present in the retroviral DNA, particularly the U3 region of the long terminal repeat (LTR). The correct scenario is described by option (b): The U3 sequence in the downstream (right) LTR is recognized as an RNA polymerase II promoter and can initiate transcription of adjacent cellular oncogene resulting in tumorigenic growth. This is because the U3 region contains promoter sequences that can activate the transcription of the cellular oncogene, potentially leading to uncontrolled cellular proliferation and tumorigenesis.