3 of the 4 options are correct. But, this statment can't be true:
"Reducing the physical size of a log file requires shrinking the file."
You can truncate a transaction log and that will reduce the physical size of the log file, therefore shrinking is not required.
Sorry for the late reply. I'm playing catchup on old questions I skipped over. :-D
I am behind on all of them but I am playing catchup anyway
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