Hint: Here, in this question you have to know the concept of potential energy which is a form of energy that is stored in an object. Basically, the potential energy of an object is due to its position related to some zero position. Further, we will discuss when a rubber is stretched, what is its potential energy.
Complete answer: Here, in this question we have asked that when a rubber is stretched, what will happen. We know that while stretching a rubber band we have to apply some amount of force and so there will be some work done in stretching it. As we know rubber bands are elastic objects so some amount of work is done on them, there will be deformation in shape and some amount of energy gets stored in the form of elastic potential energy or in form of strain. So, when we stretch a rubber band, some amount of potential energy gets stored and as we keep stretching the rubber band results in an increase of this potential energy. Hence, we can say that when we stretch a rubber band, there will be an increase in potential energy. Therefore, the correct option is (C).
Note: Also remember that as we keep stretching the rubber band, its shape is changing, due to which there will be change in potential energy. Also when the rubber band gets released after stretching, in this case the potential energy will be zero because when it gets released its potential energy is quickly changed into the kinetic energy. Therefore, option (A), (B) and (D), all are wrong.