An isolated system is that system in which
There is no exchange of energy with the surroundings.
There is exchange of mass and energy with the surroundings
There is no exchange of energy and mass with the surroundings.
There is exchange of mass with the surroundings.
In an isolated system, there is no exchange of energy or matter between the system and the surroundings. The presence of reactants in a thermos flask or any other closed insulated vessel is an example of an isolated system. So, we can say that in an isolated system neither heat nor matter can be exchanged.
Hence, option number (3) is correct.