Explanation:
External tables are read-only tables whose data resides in an external OS flat file, and whose definition is stored inside the database. Indexes cannot be created on external tables.
Incorrect Answers:
1: External tables cannot be updated. They are read-only tables.
3: Indexes cannot be created on external tables.
Reference:
OCP Oracle9i Database: New Features for Administrators, Daniel Benjamin, p. 131-134
Chapter 3: Manageability Enhancements
Oracle 9i New Features, Robert Freeman, p. 111-116
Chapter 4: New Oracle9i Database DDS and Data-Warehouse Features
Availability and Recoverability Features

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