Question

Which sentence uses possessive pronouns correctly?

Answer 1

B. A possessive noun should have its instead of it's (which is a contraction for it is).  
For A.  Diana is a singular noun and the apostrophe should come after the r instead of after the s.
For C. The duck would've dunked ITS instead of IT'S beak since it is possessive.
For D.  You do not need to put an apostrophe since theirs is already a possessive noun.

Answer 2

A. Diana pointed to the trophies that were hers