To simplify this expression, we need to follow the order of operations (PEMDAS):
1. First, we perform the multiplication of the mixed numbers:
2\(\frac{1}{4} \times 3\frac{1}{2} = \frac{9}{4} \times \frac{7}{2} = \frac{63}{8}\)
2. Then, we perform the division of the mixed numbers:
4 \(\frac{3}{8} = \frac{35}{8}\)
\(\frac{63}{8} \div \frac{35}{8} = \frac{63}{8} \times \frac{8}{35} = \frac{9}{5} =\) 1\(\frac{4}{5}\)
Therefore, the answer is option (D), 1\(\frac{4}{5}\).