Bird : Nest :: Bee : ______

The correct option is Hive.

This question is a verbal analogy of the format "A : B :: C : D", which compares the relationship between the first pair of words to find the corresponding relationship in the second pair.
Let us analyze the relationship in the first pair:
Bird : Nest
A bird is an animal/creature, and a nest is its natural home or habitat where it lives and builds shelter.

Now, we apply the same relationship to the second pair:
Bee : ______
A bee is the insect, so we need to find the word that represents its natural home or habitat where it lives and makes honey.
Let us evaluate the options:
1. Kennel: A shelter for a dog.
2. Hammock: A type of bed made of canvas or rope mesh suspended between two points, used by humans.
3. Hive: A shelter or home built by or for bees.
4. Lair: A wild animal's resting place or den (such as for a lion or wolf).

Therefore, a bee lives in a hive, just as a bird lives in a nest.