The correct answer is B.

Collateral cannot perfectly mitigate risk exposure for the following valid reasons:

1. True: The presence of a threshold value implies that a certain amount of exposure is allowed to remain uncollateralized (unsecured exposure), so risk is not perfectly mitigated below this threshold.
2. True: Delays in receiving collateral (margin period of risk) and parameters such as the minimum transfer amount (MTA) generate a discrete effect. As a result, collateral levels move in steps and cannot perfectly trace the continuous movement of exposure, leaving uncollateralized gaps.

Statement 2 is incorrect because it is generally possible to calculate accurate collateral values using standard pricing models and market data. Statement 4 is incorrect because the discreteness in collateral is primarily driven by operational parameters like the Minimum Transfer Amount (MTA) and margin call frequencies, not because collateral values are intrinsically discrete while exposures are continuous (especially with cash collateral).