Statement is incorrect: Reproduction is defined as the production of progeny possessing features similar (more or less) to their parents, not dissimilar. In asexual reproduction, offspring are often exact clones.

Statement is incorrect: While some fungi (like yeast) multiply by budding, multicellular fungi, filamentous algae, and the protonema of mosses primarily multiply by fragmentation.

Statement is correct: Mules and sterile worker bees are well-known examples of living organisms that do not reproduce.

Statement is correct: Because there are living organisms that cannot reproduce (like those in statement c), reproduction is not an all-inclusive defining characteristic of life.

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