Kiakaha

Really? But the answer says:
Non-amortizing assets, prior to the lockout or revolving period, principal repayments can
be either paid out to security holders or reinvested in additional loans.
where as the statement in the question is missing the “reinvested” part.
Maybe I’m just not getting the question. Can someone please explain to me why the other two statements related to the question are wrong?
Thanks!!