Final answer:
DNA Polymerase I functions include 5' -> 3' exonuclease to remove RNA primers and replace them with DNA, as well as 3' -> 5' exonuclease for proofreading during DNA replication. The correct option is 2.
Step-by-step explanation:
The true function of DNA Polymerase I is 5' -> 3' exonuclease activity. This activity allows the enzyme to remove RNA primers from Okazaki fragments during DNA replication and replace them with DNA nucleotides, a critical step required for the synthesizing of the lagging strand.
Additionally, DNA Polymerase I possesses a proofreading function through its 3' -> 5' exonuclease activity, which helps to correct any errors made during DNA replication by removing incorrect nucleotides. The correct option is 2.