A raised hammer possesses:
$
  {\text{A}}{\text{. K}}{\text{.E}}{\text{. only}} \\
  {\text{B}}{\text{. gravitational P}}{\text{.E}}{\text{.}} \\
  {\text{C}}{\text{. electrical energy}} \\
  {\text{D}}{\text{. sound energy}} \\
$

- Hint: To answer this question, one should know about the different forms of energy and when they are stored by virtue of which action.

Complete step-by-step solution -
Potential energy:
It’s the form of energy stored in an object when it is at rest, raised to some height from ground or changes its shape.
Kinetic energy:
It’s the form of energy stored in an object by virtue of its motion.
When the hammer is in raised position:
It is at some height.
It is at rest on top since, v=0.
So the energy possessed by it is the gravitational potential energy.
All conservative forces are associated with potential energy. Gravity is also a conservative field. Gravitational potential energy represents the potential an object has when located at a particular position in a gravitational field.
Conservation of energy principle states that the total energy of an isolated system is constant and it just keeps converting in different forms of energy.
When the hammer is being raised, it has some velocity and so initially it contains kinetic energy. On its way up, its kinetic energy keeps converting to potential energy. When finally, the top is reached, the whole kinetic energy gets converted into its gravitational potential energy. At this point it has zero velocity and just potential energy (=mgh). This potential stored in the hammer is then used as the force required to work, and hammer the nail or anything
In general, the conversion between these two forms of energy gives us the motions observed in the real world.

Note: K.E. + P.E. = T.E. (Total energy)
When an object is at rest, K.E. is 0 and P.E. is max i.e. equal to T.E. and when an object is in motion its P.E. is minimum and K.E. is maximum.