Estradiol normally found in the bloodstream of a female rat fetus neither masculinizes nor feminizes its development because it is:
a. chemically converted to testosterone.
b. bound to alpha-fetoprotein.
c. dissolved in the fat supplies of the fetus.
d. not effective on cells even if it did enter them.

The answer is b. bound to alpha-fetoprotein (AFP).

Explanation:

Estrogen Sequestration by Alpha-fetoprotein:

Estradiol or estrogens present in the fetal plasma are believed to suppress the development of feminine characters in the developing embryo. They tend to defeminize and masculinize the fetal brain. Studies have shown that in female rats, the presence of excess estradiol in the fetus leads to the absence of female sexual characteristics and anovulatory infertility in adulthood.

Alpha fetoprotein is a protein produced and secreted by the fetal liver into the amniotic fluid. Alpha-fetoprotein is high affinity estrogen binding protein. By binding and sequestering estradiols, it protects the developing female brain from harmful defeminizing effects of estrogens.