The correct answer is option 3, which states that the state possesses both internal and external sovereignty.

Internal sovereignty refers to a state`s authority and control over its own territory and population. It allows the state to exercise power and create and enforce laws within its borders without interference from external actors. This means that the government has the ultimate authority to govern its citizens and establish its own legal framework.

External sovereignty, on the other hand, refers to a state`s independence and ability to interact and engage in relationships with other states. It allows the state to participate in international affairs, make treaties, and maintain diplomatic relations with other countries.

Therefore, option 3 correctly states that the state possesses both internal sovereignty over its own affairs and external sovereignty in its interactions with other states.