Please choose the sentence that is punctuated correctly.

As the poem continues, the narrator "thinks that a cardinal might enjoy the beauty of nature's celebration $($Smith$)."$

As the poem continues, the narrator, "thinks that a cardinal might enjoy the beauty of nature's celebration" $($Smith$).$

As the poem continues, the narrator "thinks that a cardinal might enjoy the beauty of nature's celebration." $($Smith$)$

As the poem continues, the narrator "thinks that a cardinal might enjoy the beauty of nature's celebration" $($Smith$).$