Correct option is C
Given:
Quadrilateral formed by joining the mid-points of the sides of a quadrilateral PQRS
Solution:

Let us join AC and BD
In triangle ABC
P and Q are the mid points of AB, BC respectively
So, and PQ =AC ….(1)
Similarly in triangle ADC
and SR = AC …(2)
Clearly and PQ=SR
Since in quadrilateral PQRS one pair of side is equal and parallel to each parallelogram
So and PS = QR ….(3)
In triangle BCD Q and R are mid point of side BC and CD respectively
So and QR = BD ….(4)
However the diagonal of rectangle is equal
By using eq(1),(2),(3) and (4)
PQRS is a rhombus if AC and BD are equal