Step 1: Consider each gene separately.
For the cross
\[
Aa \times Aa,
\]
the probability of obtaining a heterozygous genotype is
\[
P(Aa)=\frac{1}{2}.
\]
Similarly, for
\[
Bb \times Bb,
\]
the probability of obtaining
\[
Bb
\]
is
\[
P(Bb)=\frac{1}{2}.
\]
Step 2: Apply the multiplication rule.
Since the two genes assort independently,
\[
P(AaBb)
=
P(Aa)\times P(Bb)
=
\frac12\times\frac12
=
\frac14.
\]
Hence,
\[
\boxed{\frac14}
\]
is the required probability.
Therefore,
\[
\boxed{(C)}
\]
is the correct answer.