Answer: Bit 5 has the error. It should be 1.
Here, parity bits are 1,2,4 (power of 2).
Hamming code based on data bits received = 110
Bit 1 = Bit 3 $\oplus$ Bit 5 = 1 $\oplus$ 0 = 1. (XOR of all bits having the least significant digit as 1)
Bit 2 = Bit 3 $\oplus$ Bit 6 = 1 $\oplus$ 0 = 1. (XOR of all bits having the second least significant digit as 1)
Bit 7 = Bit 4 $\oplus$ Bit 5 $\oplus$ Bit 6 = 0 $\oplus$ 0 $\oplus$ 0 = 0. (XOR of all bits having the third least significant digit as 1)
But the received message has Bit 1 = 0, Bit 2 = 1, Bit 7 = 1 (Actual hamming code)
Bit error = Hamming code based on data bits received $\oplus$ Actual hamming code = 110 $\oplus$ 011 = 101 (i.e. Bit 5 has the error)