Looking at the multiple choices, you can immediately rule out the first two, because the exponent is only applied to the fraction in the parentheses. Then, looking at the remaining options, it is the third one because when you raise a fraction to a certain power you raise both the numerator and the denominator to that power. So, \((\frac{1}{4})^2 = (\frac{1^2}{4^2}) = \frac{1}{16}\) so the answer is the third option.