An ABS warning light remains illuminated. A digital multimeter shows a reading of 0.8 volts DC at the signal terminal of a passive wheel speed sensor when the wheel is spun by hand. What does this indicate?

1. The sensor is functioning correctly and generating the expected alternate current (AC) voltage signal
2. The multimeter is set to the incorrect scale, as passive sensor output must be measured on the AC voltage scale
3. The ABS reluctor wheel has lost its magnetic charge
4. The sensor coil is shorted directly to the 5V reference supply wire