All three statements about XML CDATA sections are correct. (1) CDATA marks a block of character data that the XML parser does not parse for markup — tags/entities inside are treated as literal text. (2) A CDATA section cannot contain the literal string "]]>" because that sequence is reserved as the CDATA closing delimiter; if you need literal "]]>" you must split it across sections. (3) CDATA sections cannot be nested — you cannot place one CDATA block inside another. Since all three statements are individually true and consistent with the XML spec, 'Statement 1, 2, 3 are correct' is the right choice; the other options each wrongly omit at least one true statement.