How is a challenge/response protocol utilized with token device implementations?

A.
This protocol is not used; cryptography is used.

B.
An authentication service generates a challenge, and the smart token generates a response based on the challenge.

C.
The token challenges the user for a username and password.

D.
The token challenges the user�s password against a database of stored credentials.

Explanation:
B: An asynchronous token device is based on challenge/response mechanisms. The authentication service sends the user a challenge value, which the user enters into the token. The token encrypts or hashes this value, and the user uses this as her one-time password