Explanation:
When setting up a recovery catalog, you need include the recovery catalog in your backup strategy. And NEVER create the recovery catalog in the target database!
Incorrect Answers:
2: The target database cannot be used to store the recovery catalog.
4: Do not use the machine with OLTP systems running to run the catalog database: it will cause performance issues because of high volume of transaction activity in OLTP database.
5: Do not store the recovery catalog database on the same disk as one of the target datafiles: even better to use different machine for the recovery catalog.
Oracle 8, DBA Certification Exam Guide, Jason S. Couchman, p. 617-619
Chapter 13: Using Recovery Manager for Backups

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