The orbital velocity $v_{\text{orb}}$ of a satellite circulating around a planet of mass $M$ at a distance $r$ from the planetary center is:
$$v_{\text{orb}} = \sqrt{\frac{GM}{r}}$$
1. Just above the Earth's surface, the radial distance equals the planet's radius ($r_1 = R$):
$$V = \sqrt{\frac{GM}{R}}$$
2. At an altitude of half the Earth's radius ($h = \frac{R}{2}$), the total distance from the center is $r_2 = R + h = R + \frac{R}{2} = \frac{3R}{2}$:
$$V' = \sqrt{\frac{GM}{\frac{3R}{2}}} = \sqrt{\frac{2GM}{3R}}$$
Setting up the ratio between the new velocity and our baseline surface profile:
$$\frac{V'}{V} = \frac{\sqrt{\frac{2GM}{3R}}}{\sqrt{\frac{GM}{R}}} = \sqrt{\frac{2}{3}} \implies V' = \sqrt{\frac{2}{3}} V$$
Final Answer:
The orbital velocity at that altitude is $\sqrt{\frac{2}{3}} V$, which corresponds to option (B).