Step 1:Calculate the magnetic field at the location of the square loop.
Given,
\[
z=\sqrt3\,R
\]
Hence,
\[
R^2+z^2
=
R^2+3R^2
=
4R^2
\]
Therefore,
\[
B=
\frac{\mu_0IR^2}
{2(4R^2)^{3/2}}
\]
\[
B=
\frac{\mu_0IR^2}
{2(8R^3)}
\]
\[
B=
\frac{\mu_0I}{16R}
\]
Step 2: Find the magnetic flux through the square loop.
Area of square loop:
\[
A=a^2
\]
Therefore,
\[
\Phi=BA
\]
\[
\Phi=
\frac{\mu_0I}{16R}\,a^2
\]
\[
\Phi=
\frac{\mu_0Ia^2}{16R}
\]
Step 3: Calculate mutual inductance.
\[
M=\frac{\Phi}{I}
\]
\[
M=
\frac{\mu_0a^2}{16R}
\]
Step 4: State the answer.
\[
{
M=\frac{\mu_0a^2}{16R}
}
\]
Hence, the correct option is
\[
{(D)}
\]