For VMs on a Type 1 hypervisor, which statement about IP and MAC addressing is correct?

Each virtual machine (VM) on a Type 1 hypervisor functions as an independent network host. Therefore, to communicate on a network, each VM must have its own unique IP address for Layer 3 identification and its own unique MAC address for Layer 2 identification. Without unique addresses, network devices would be unable to correctly route or switch traffic to specific VMs. Sharing the physical server's IP or MAC address would lead to address conflicts and prevent individual VMs from being reachable or from initiating their own network connections.