A square piece of paper is folded twice into four equal quarters, as shown below, then cut along the dashed line. When unfolded, the paper will match which of the following figures?
[asy]  //Restored original diagram. Alter it if you would like, but it was made by TheMathGuyd, // Diagram by TheMathGuyd. I even put the lined texture :) // Thank you Kante314 for inspiring thicker arrows. They do look much better size(0,3cm); path sq = (-0.5,-0.5)--(0.5,-0.5)--(0.5,0.5)--(-0.5,0.5)--cycle; path rh = (-0.125,-0.125)--(0.5,-0.5)--(0.5,0.5)--(-0.125,0.875)--cycle; path sqA = (-0.5,-0.5)--(-0.25,-0.5)--(0,-0.25)--(0.25,-0.5)--(0.5,-0.5)--(0.5,-0.25)--(0.25,0)--(0.5,0.25)--(0.5,0.5)--(0.25,0.5)--(0,0.25)--(-0.25,0.5)--(-0.5,0.5)--(-0.5,0.25)--(-0.25,0)--(-0.5,-0.25)--cycle; path sqB = (-0.5,-0.5)--(-0.25,-0.5)--(0,-0.25)--(0.25,-0.5)--(0.5,-0.5)--(0.5,0.5)--(0.25,0.5)--(0,0.25)--(-0.25,0.5)--(-0.5,0.5)--cycle; path sqC = (-0.25,-0.25)--(0.25,-0.25)--(0.25,0.25)--(-0.25,0.25)--cycle; path trD = (-0.25,0)--(0.25,0)--(0,0.25)--cycle; path sqE = (-0.25,0)--(0,-0.25)--(0.25,0)--(0,0.25)--cycle; filldraw(sq,mediumgrey,black); draw((0.75,0)--(1.25,0),currentpen+1,Arrow(size=6)); //folding path sqside = (-0.5,-0.5)--(0.5,-0.5); path rhside = (-0.125,-0.125)--(0.5,-0.5); transform fld = shift((1.75,0))*scale(0.5); draw(fld*sq,black); int i; for(i=0; i<10; i=i+1) {   draw(shift(0,0.05*i)*fld*sqside,deepblue); } path rhedge = (-0.125,-0.125)--(-0.125,0.8)--(-0.2,0.85)--cycle; filldraw(fld*rhedge,grey); path sqedge = (-0.5,-0.5)--(-0.5,0.4475)--(-0.575,0.45)--cycle; filldraw(fld*sqedge,grey); filldraw(fld*rh,white,black); int i; for(i=0; i<10; i=i+1) {   draw(shift(0,0.05*i)*fld*rhside,deepblue); } draw((2.25,0)--(2.75,0),currentpen+1,Arrow(size=6)); //cutting transform cut = shift((3.25,0))*scale(0.5); draw(shift((-0.01,+0.01))*cut*sq); draw(cut*sq); filldraw(shift((0.01,-0.01))*cut*sq,white,black); int j; for(j=0; j<10; j=j+1) { draw(shift(0,0.05*j)*cut*sqside,deepblue); } draw(shift((0.01,-0.01))*cut*(0,-0.5)--shift((0.01,-0.01))*cut*(0.5,0),dashed); //Answers Below, but already Separated //filldraw(sqA,grey,black); //filldraw(sqB,grey,black); //filldraw(sq,grey,black); //filldraw(sqC,white,black); //filldraw(sq,grey,black); //filldraw(trD,white,black); //filldraw(sq,grey,black); //filldraw(sqE,white,black); [/asy]
Notice that when we unfold the paper along the vertical fold line, we get the following shape:

[working version of the diagram (harshu13)]:
[asy]  size(90); path sq = (-0.5,0)--(0.5,0)--(0.5,0.5)--(-0.5,0.5)--cycle; path trE = (-0.25,0)--(0.25,0)--(0,0.25)--cycle;  real sh = 1.5; filldraw(shift((sh,-sh))*sq,mediumgrey,black); filldraw(shift((sh,-sh))*trE,white,black);  size(90); path sq = (-0.5,-0.5)--(0.5,-0.5)--(0.5,0.5)--(-0.5,0.5)--cycle; path sqE = (-0.25,0)--(0,-0.25)--(0.25,0)--(0,0.25)--cycle;  real sh = 1.5; filldraw(shift((sh,-sh))*sq,mediumgrey,black); filldraw(shift((sh,-sh))*sqE,white,black); [/asy]
It is clear that the answer is $\boxed{\textbf{(E)}}$.
~MrThinker