The sun is located

in the central core of the milky way galaxy
in the bar of the milky way
in an arm about 25% of the distance from the center of the milky way to its outer edge
in an arm about 75% of the distance from the center of the milky way to its outer edge

its definately in an arm. your best bet would be 25 percent or C

The correct answer for the blank is-

in an arm about 75% of the distance from the center of the Milky Way to its outer edge.

The Sun is located in the inside of the Orion Arm, which is a branch of the Sagittarius Arm that is considered to be one of the major arms of grand spiral galaxy ( The milky way) .

The Sun is located about 26,000 ly ( light years) far from the center, which is approximately about 75% of the distance from the center of the Milky Way to its outer edge.

Thus, last option is the right answer.