To annualize daily volatility, we use the square root of time rule. Since there are typically 252 trading days in a year, the annualized volatility is calculated as:

σ_annual = √(252 × σ²_daily)

Given daily volatility = 0.3% = 0.003

σ_annual = √(252 × 0.003²) = √(252 × 0.000009) = √0.002268 = 0.047623 = 4.7623%

This matches option D (4.76%).

Key Concept: The square root of time rule assumes returns are independent and identically distributed (i.i.d.), which allows volatility to scale with the square root of time.