Step 1 :The sampling distribution of $\hat{p}$ is approximately normal due to the large sample size.
Step 2 :The mean of the sampling distribution $\mu_{\hat{p}}$ is equal to the population proportion $p=0.26$.
Step 3 :The standard deviation of the sampling distribution $\sigma_{\hat{p}}$ can be calculated using the formula $\sqrt{\frac{p(1-p)}{n}}$.
Step 4 :Substitute $p = 0.26$ and $n = 1000$ into the formula, we get $\sigma_{\hat{p}} = \sqrt{\frac{0.26(1-0.26)}{1000}} \approx 0.0139$.
Step 5 :Final Answer: The sampling distribution of $\hat{p}$ is approximately normal, with $\mu_{\hat{p}}=0.26$ and $\sigma_{\hat{p}} \approx 0.0139$. So, the correct option is B. Approximately normal, $\mu_{\hat{p}}=0.26$ and $\sigma_{\hat{p}} \approx 0.0139$.