The correct option is B cold
Adverbs modify verbs, adjectives and sometimes other adverbs in a sentence.
In this sentence, The adverb, 'extremely' is modifying the adjective 'cold'. It states to what extent the water was cold. Hence, Option B is correct.
Option A is incorrect as 'water' is a noun. Adverbs don't modify nouns.
Option C is incorrect as 'extremely' is the adverb itself.
Option D is incorrect as 'was' is an auxiliary verb which is not being modified by the adverb in this sentence.