Answer: (ii) Features the system must perform

Functional requirements describe what the system must do — the specific functions, features, services, or behaviours the software must provide (e.g., "the system shall allow a user to withdraw cash", "the system shall send an e-mail notification"). They define inputs, outputs, and the processing/transformation rules.

By contrast:

• (i) Constraints on the software design — these are design/implementation constraints (often called non-functional or design constraints).
• (iii) Performance and reliability requirements — these are non-functional requirements (quality attributes such as speed, security, availability).
• (iv) Documentation standards — process/standards issues, not functional behaviour.

So functional requirements = features the system must perform — option (ii).