To convert a value from one unit to another, we need a conversion factor to multiply with the value. For this case, we know that for 1hm it is equal to 100 m and that 1 m^3 is equal to 1000 L. We use these:
25 L (1 m^3 / 1000 L ) ( 1 hm / 100 m )^3 = 2.5x10^-8 hm^3
Therefore, the correct answer should be the first option. The statement "fraction cubed: one m over ten to the negative second power m" is not a correct factor.