The answer is correct.
The terraform refresh command reads the current settings from all managed remote objects and updates the Terraform state to match.
Source: https://www.terraform.io/cli/commands/refresh
B. Your state file.
The terraform refresh command in Terraform is used to update the Terraform state file with the current real-world state of the infrastructure. When the terraform refresh command is run, Terraform reads the current state of the resources from the infrastructure provider, and then updates the state file with any changes that have occurred outside of Terraform.
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