To do this, simply create a new Electrum wallet and select the "Import" option. Paste the master public key into the "Public Key" field, and with this setup, Electrum will generate addresses for your watch-only wallet without requiring your private keys.
To create a watch-only wallet using your master public key, you should select "Standard wallet" and then "Use a master key".
There is no "Import" option at all. There's "Import bitcoin addresses or private keys" option which can't be used for importing a master key.
Yes, you are right. The last time I did this was a long time ago, so I forgot the exact procedure. I see Aikidoka has already provided a clear explanation with screenshots, so there's no need for me to repeat the steps.
@unknowncustomer, you can follow the steps shared by Aikidoka to create a watch-only wallet using your Master Public Key.