Which of the following options are the correct

Pretty Permalinks will work on any webserver that is configured properly to support WP permalinks.

Apache, LiteSpeed, nginx, IIS and others have all worked fine.

We recommend using the “postname” permalink setting.

Your webhost would need to help you get the webserver configured correctly to support WP Permalinks. We can’t help with that part unfortunately.

I just want to know which of the option is correct?
All 1, 2, and 3
Only 1 and 2
Only 1 and 3
Only 2 and 3

If you’re using Apache, then WordPress will add its own rewrite rules to the .htaccess file automatically when saving the WP Permalink settings. Permalinks will work as expected from there as long as they’re not set to the “Default” option in WordPress -> Settings -> Permalinks page in your dashboard. That’s usually all you need to do.

If your permalinks are not working, you’ll need to work with your webhost to fix them. We cannot help with that.

If you’re not using Apache, then WordPress doesn’t officially support any other webservers for Permalinks. That doesn’t mean they won’t work, it just means your webhost will have to configure the virtual hosts correctly to support them.

I’m not familiar with what the FollowSymLinks directive does, or how it relates to permalinks.