**Core Concept**
Alpha-fetoprotein (AFP) is a major plasma protein produced by the yolk sac and the fetal liver during fetal development. It plays a crucial role in the development and maintenance of the fetal gastrointestinal tract. Elevated levels of AFP can indicate various fetal abnormalities, including neural tube defects and certain genetic conditions.

**Why the Correct Answer is Right**
The correct answer is related to the role of AFP in fetal development. AFP is a glycoprotein that inhibits the growth of certain bacteria in the fetal gut, thereby protecting the fetus from infection. This is achieved through the binding of AFP to the bacterial cell wall, which ultimately leads to the inhibition of bacterial growth. This mechanism is essential for the normal development of the fetal gastrointestinal tract.

**Why Each Wrong Option is Incorrect**
**Option A:** Elevated levels of AFP are associated with liver cancer, which is incorrect. While AFP is a tumor marker for certain types of cancer, including hepatocellular carcinoma, it is not directly associated with liver cancer.
**Option B:** AFP is produced by the placenta, which is incorrect. AFP is primarily produced by the yolk sac and the fetal liver during fetal development.
**Option C:** AFP is used as a marker for ovarian cancer, which is incorrect. AFP is not a specific marker for ovarian cancer and is not used for its diagnosis.

**Clinical Pearl / High-Yield Fact**
It's essential to note that elevated levels of AFP can be seen in various conditions, including neural tube defects, Down syndrome, and certain genetic conditions. A high AFP level in a pregnant woman should prompt further investigation to determine the underlying cause.

**Correct Answer: D.**