Explanation:
Free lists are used to identify blocks available for inserts.
Incorrect Answers:

2: Free lists do not identify free extents in a table space.
3: They also have nothing to do with blocks beyond the high water mark in a segment.
4: Free lists do not relate with segments belonging to a Parallel Server instance.
Oracle 8, DBA Certification Exam Guide, Jason S. Couchman, p. 945-947. Chapter 20: Tuning Other Areas of the Oracle Database

---