Answer: I would contend that the right answer is the D) The mother believes that her daughter is not trying her best, and the daughter disagrees.
Explanation: Just to elaborate a little on the answer, it can be added that since the mother starts by praising her daughter—“You pick up fast" [...] You have natural talent"— and then she adds "You could been genius if you want to" and "You just not trying,” it appears that she expects a lot from her and she believes that she is not trying her best. The daughter, however, disagrees, by simply replying "No, I couldn't" to her mother's statement that she could be a genius if she wanted to.