The correct option is
C Gracefully
In order to fill in the blank with the suitable degree of the adverb, let's understand what adverbs are. Adverbs are words that describe something about the verbs. For example, "I ran fast". Here, 'fast' describes the way 'I' ran, so 'fast' is an adverb. Degrees of the adverbs explain us the intensity of an action, adjective or another adverb. For example, "She ran too fast". Here, 'fast' is the adverb and 'too' intensifies how fast she ran.Option A - 'More gracefully' is an adverb, which can be used to intensify how gracefully the action is done. 'More' is used to compare an action with another. Here, as there is no comparison, we can't use 'more gracefully'. Hence, option A is incorrect.
Option B - 'Most gracefully' is an adverb, which is used to intensify the superlative degree of the adverb. As the sentence doesn't state the highest degree of the action, we can't use 'most' here. Hence, option B is incorrect.
Option D - 'Grace' is a noun, as we need an adverb, we can't use 'grace' here. Hence, option D is incorrect.
Option C - 'Gracefully' is an adverb which is the positive degree of the adverb. It describes the way 'Asma walks'. Thus option C is the correct answer.
'Asma walks very gracefully.'