Which of the following BEST reduces the likelihood of fraudulent activity that occurs through use of a digital wallet?

Requiring multi-factor authentication (MFA) adds an essential layer of security by demanding two or more verification methods (e.g., something you know, something you have, or something you are). This significantly reduces the likelihood of fraudulent activity, even if a primary credential like a password is compromised, because the attacker would also need access to the second factor.

Using a digital key to encrypt contents protects the data at rest but does not inherently prevent an unauthorized user who gains access to the wallet from using it for fraudulent transactions if they can decrypt it or use the key.

Enabling audit logging helps detect fraudulent activity after it occurs and aids in forensics, but it does not reduce the likelihood of the activity itself.

Requiring PKI to authorize transactions is a strong authentication method, but MFA generally provides a broader and more common approach to securing access to the wallet application itself, which then enables transactions.