At point B, the object has maximum potential energy and minimum kinetic energy. This is because potential energy is directly related to the height of the object above the ground, and at point B the object is at its highest point. As the object falls from point B to point C, its potential energy decreases while its kinetic energy increases. This is because as the object falls, it loses height and therefore potential energy, while gaining speed and therefore kinetic energy. At point C, the object has maximum kinetic energy and minimum potential energy, as it is at its lowest point and moving at its fastest speed. The interchange between potential and kinetic energy occurs as the object moves from point B to point C, with potential energy decreasing and kinetic energy increasing.