The testes in the male reproductive system are situated outside the abdominal cavity within a pouch called the scrotum. The scrotum is a sac of skin that hangs outside the body and contains the testes. This placement of the testes outside the body is important for their proper functioning. The scrotum helps to regulate the temperature of the testes, keeping them slightly cooler than body temperature. This is necessary for the production of sperm, which requires a lower temperature than the rest of the body. Additionally, the scrotum protects the testes from injury. It is important for the testes to be outside the body because if they were inside, the higher body temperature would negatively affect sperm production. Therefore, the correct answer is option 2: Scrotum.