Hi! I've never taken a class for web development, so I can't say for sure. But I think part (c) is looking for an image of you that is probably low in file size while still looking good. That means that .jpg will probably do, you can look in your photo editor when saving/exporting for settings such as compression and number of colors, and you can try to make the image just the right size for a normal screen (as long as it looks good on a larger screen).
Beyond that, there's just many details to this. Just follow the instructions a few times.
Make the image.
Make the HTML without the CSS.
Make the CSS and put it in a <style> HTML element.
Also, the question is weird: it suggests using an "alt" tag. I think it's referring to the "alt" attribute of the <img/> tag. This specifies text that can appear if for any reason the image can't be displayed.
You can give an element an id by giving it the id attribute, like <div id="holder"></div>.
And the image can be a link by having the <img/> element inside of and <a> element.
