The expression to simplify is $(5^{-2})^3$.

To simplify this, apply the power of a power rule, which states: $(a^m)^n = a^{m \cdot n}$

In this case, we have $5^{-2}$ raised to the power of 3: $(5^{-2})^3 = 5^{-2 \cdot 3} = 5^{-6}$

Since $5^{-6} = \frac{1}{5^6}$, the correct answer is: $\boxed{\frac{1}{5^6}}$

Would you like a detailed breakdown or have any questions? Here are five related questions:

1. How do you handle negative exponents in general?
2. What is the rule for multiplying exponents with the same base?
3. Can you convert a negative exponent into a fraction?
4. How would you simplify $(2^{-3})^4$?
5. What happens when a base raised to a negative exponent is squared?

Tip: When you encounter a negative exponent, remember that it simply means taking the reciprocal of the base raised to the corresponding positive exponent.