Correct Answer - Option 2 : Both eddy current and hysteresis losses
CRGO laminations in a transformer are used to minimize both eddy current and hysteresis losses. CRGO is cold rolled grain oriented steel and as the name suggests, its grains (crystals) are aligned in the direction of rolling. When the magnetic flux passes through it, the magnetic domains (region in grains with aligned magnetic moment) get aligned in one direction causing minimum resistant path to flux causing lesser hysteresis loss, furthermore, high silicon content leads to high resistance decreasing eddy currents.
