Answer:
(D) The upward momentum is transferred to the earth.
Step-by-step explanation:
We can consider the ball + the Earth as a single, isolated system: therefore, the total momentum of the two objects must be conserved.
Assuming the Earth is initially at rest (so, its initial momentum is zero:
, and calling
the initial momentum of the ball, the total initial momentum of the ball+Earth system is

When the ball returns to your hand, its momentum has changed direction, so the final momentum of the ball is

And since the total momentum of the ball+Earth system must be conserved:

We can write:

Which means that the variation of momentum of the ball has converted into variation of momentum of the Earth. Of course, given the huge mass of the Earth, it is not possible to observe this variation of momentum of the Earth (because the corresponding variation of velocity is negligible).