Concept:
For an amplitude modulated (AM) wave,
\[
m=\frac{A_{\max}-A_{\min}}
{A_{\max}+A_{\min}}
\]
where
\[
m=\text{modulation index}
\]
\[
A_{\max}=\text{maximum amplitude}
\]
\[
A_{\min}=\text{minimum amplitude}
\]
This relation is frequently used in communication systems.
Step 1: Interpret the statement given in the question.
The maximum amplitude is \(400%\) more than the minimum amplitude.
This means
\[
A_{\max}=A_{\min}+400%\,A_{\min}
\]
\[
A_{\max}=A_{\min}+4A_{\min}
\]
\[
A_{\max}=5A_{\min}
\]
Let
\[
A_{\min}=A
\]
Then,
\[
A_{\max}=5A
\]
Step 2: Substitute into the modulation index formula.
\[
m=\frac{A_{\max}-A_{\min}}
{A_{\max}+A_{\min}}
\]
Substituting,
\[
m=\frac{5A-A}{5A+A}
\]
\[
m=\frac{4A}{6A}
\]
\[
m=\frac{2}{3}
\]
Step 3: Write the final result.
Therefore, the modulation index is
\[
\boxed{\frac{2}{3}}
\]
Hence, the correct option is
\[
\boxed{\text{(C)}}
\]