Endemism refers to:

The correct answer is Option (1) → Species confined to that region and not found anywhere else

Endemism means that a species is found only in one particular region and nowhere else. A region with many endemic species, together with high species richness, can be marked as a biodiversity hotspot.

(1) Species confined to that region and not found anywhere else — Correct. This is the meaning of endemism.

(2) Extinct species confined to that region — Incorrect. Endemic species are living species. Extinct species are those that have disappeared.

(3) Species found everywhere — Incorrect. This is the opposite of endemism. A species found everywhere is not confined to any one region.

(4) Alien species — Incorrect. An alien species is one brought into a region from outside. An endemic species belongs to that region only.

NCERT Extract:
How Do We Conserve Biodiversity? – “… They identified for maximum protection certain ‘biodiversity hotspots’ regions with very high levels of species richness and high degree of endemism (that is, species confined to that region and not found anywhere else).”