The group of words that form a prepositional phrase is C) of hats.
A prepositional phrase is a group of words that consist of a preposition and it is followed by an object. The object is generally a noun, but it can also be a gerund (a verb form ending in –ing that functions as a noun), or even a clause. In this sentence, “of” is the preposition and “hats” is a noun functioning as a direct object.
