During his reign as the King of Spain from 1556 to 1598, Philip II was known as a consummated champion of Roman Catholic Counter-Reformation, up to the point that he was perceived as putting the church's interest above those of Spain. With the Spanish Inquisition still in full motion and the full support of the monarch, the Spanish Catholic Church and the government prosecuted and deported a vast majority of the Jewish Conversos (Converts from Judaism), Moriscos (Converts from Islam) and Protestants that were living within the boundaries of the Spanish empire soil.
Considering these facts, the correct answer is C) Both were persecuted by the Spanish government.