Step 1: When memory is given out in fixed-size units, a process may need less than a full unit but still gets the whole unit.
Step 2: The leftover space inside the allocated block cannot be used by any other process. This wasted space that sits inside an allocated block is called internal fragmentation.
Step 3: External fragmentation is different. It is free space scattered between allocated blocks, not inside them. A page fault and segmentation are not fragmentation types.
Step 4: Since the block is larger than the request and the extra room is wasted inside it, the answer is (B) Internal Fragmentation.