Which of the following statements about the use of options in contracts is correct?

Options can only be used for requirements below the simplified acquisition threshold.

The option should always represent known firm requirements where funds are not currently available.

The contracting officer is prohibited from using options if the market price for the supplies or services involved are likely to change substantially.

The contracting officer is never prohibited from using options.

Please provide FAR/DFAR reference with an answer in proper format.