This is the correct answer because it is FALSE.
Diameter is an AAA protocol, AAA stands for authentication, authorization and accounting protocol for computer networks, and it is a successor to RADIUS.
The name is a pun on the RADIUS protocol, which is the predecessor (a diameter is twice the radius).
The main differences are as follows:
Reliable transport protocols (TCP or SCTP, not UDP)
The IETF is in the process of standardizing TCP Transport for RADIUS
Network or transport layer security (IPsec or TLS)
The IETF is in the process of standardizing Transport Layer Security for RADIUS
Transition support for RADIUS, although Diameter is not fully compatible with RADIUS
Larger address space for attribute-value pairs (AVPs) and identifiers (32 bits instead of 8 bits)
Client–server protocol, with exception of supporting some server-initiated messages as well
Both stateful and stateless models can be used
Dynamic discovery of peers (using DNS SRV and NAPTR)
Capability negotiation
Supports application layer acknowledgements, defines failover methods and state machines (RFC 3539)
Error notification
Better roaming support
More easily extended; new commands and attributes can be defined
Aligned on 32-bit boundaries
Basic support for user-sessions and accounting
A Diameter Application is not a software application, but a protocol based on the Diameter base protocol (defined in RFC 3588). Each application is defined by an application identifier and can add new command codes and/or new mandatory AVPs. Adding a new optional AVP does not require a new application.
Examples of Diameter applications:
Diameter Mobile IPv4 Application (MobileIP, RFC 4004)
Diameter Network Access Server Application (NASREQ, RFC 4005)
Diameter Extensible Authentication Protocol (EAP) Application (RFC 4072)
Diameter Credit-Control Application (DCCA, RFC 4006)
Diameter Session Initiation Protocol Application (RFC 4740)
Various applications in the 3GPP IP Multimedia Subsystem
All of the other choices presented are true. So Diameter is backwork compatible with Radius (to some extent) but the opposite is false.
Reference(s) used for this question:
TIPTON, Harold F. & KRAUSE, MICKI, Information Security Management Handbook, 4th Edition, Volume 2, 2001, CRC Press, NY, Page 38. and https://secure.wikimedia.org/wikipedia/en/wiki/Diameter_%28protocol%29

In response to an access-request from a client, a RADIUS server returns one of three authentication responses: access-accept, access-reject, or access-challenge, the latter being a request for additional authentication information such as a onetime password from a token or a callback identifier. Source: TIPTON, Harold F. & KRAUSE, MICKI, Information Security Management Handbook, 4th Edition, Volume 2, 2001, CRC Press, NY, page 36.

Radius, TACACS and DIAMETER are classified as authentication, authorization, and accounting (AAA) servers. Source: TIPTON, Harold F. & KRAUSE, MICKI, Information Security Management Handbook, 4th Edition, Volume 2, 2001, CRC Press, NY, Page 33.
also see: The term “AAA” is often used, describing cornerstone concepts [of the AIC triad] Authentication, Authorization, and Accountability. Left out of the AAA acronym is Identification which is required before the three “A’s” can follow. Identity is a claim, Authentication proves an identity, Authorization describes the action you can perform on a system once you have been identified and authenticated, and accountability holds users accountable for their actions. Reference: CISSP Study Guide, Conrad Misenar, Feldman p. 10-11, (c) 2010 Elsevier.

Access controls are meant to protect facilities and computers as well as people.
In some situations, the objectives of physical access controls and the protection of people’s lives may come into conflict. In theses situations, a person’s life always takes precedence.
Many physical security controls make entry into and out of a facility hard, if not impossible. However, special consideration needs to be taken when this could affect lives. In an information processing facility, different types of locks can be used and piggybacking should be prevented, but the issue here with automatic locks is that they can either be configured as fail-safe or fail-secure.
Since there should only be one access door to an information processing facility, the automatic lock to the only door to a man-operated room must be configured to allow people out in case of emergency, hence to be fail-safe (sometimes called fail-open), meaning that upon fire alarm activation or electric power failure, the locking device unlocks. This is because the solenoid that maintains power to the lock to keep it in a locked state fails and thus opens or unlocks the electronic lock.
Fail Secure works just the other way. The lock device is in a locked or secure state with no power applied. Upon authorized entry, a solinoid unlocks the lock temporarily. Thus in a Fail Secure lock, loss of power of fire alarm activation causes the lock to remain in a secure mode.
Reference(s) used for this question:
Harris, Shon (2012-10-18). CISSP All-in-One Exam Guide, 6th Edition (p. 451). McGraw-Hill. Kindle Edition. and Hernandez CISSP, Steven (2012-12-21). Official (ISC)2 Guide to the CISSP CBK, Third Edition ((ISC)2 Press) (Kindle Locations 20249-20251). Auerbach Publications. Kindle Edition.

The Clark Wilson integrity model addresses the three following integrity goals: 1) data is protected from modification by unauthorized users; 2) data is protected from unauthorized modification by authorized users; and 3) data is internally and externally consistent. It also defines a Constrained Data Item (CDI), an Integrity Verification Procedure (IVP), a Transformation Procedure (TP) and an Unconstrained Data item. The Bell-LaPadula and Take-Grant models are not integrity models. Source: KRUTZ, Ronald L. & VINES, Russel D., The CISSP Prep Guide: Mastering the Ten Domains of Computer Security, John Wiley & Sons, 2001, Chapter 5: Security Architecture and Models (page 205).

Sensitivity labels are a preventive security application controls, such as are firewalls, reference monitors, traffic padding, encryption, data classification, one-time passwords, contingency planning, separation of development, application and test environments.
The incorrect answers are:
Detective security controls -Intrusion detection systems (IDS), monitoring activities, and audit trails.
Compensating administrative controls -There no such application control.
Preventive accuracy controls -data checks, forms, custom screens, validity checks, contingency planning, and backups.
Sources: KRUTZ, Ronald L. & VINES, Russel D., The CISSP Prep Guide: Mastering the Ten Domains of Computer Security, John Wiley & Sons, 2001, Chapter 7: Applications and Systems Development (page 264). KRUTZ, Ronald & VINES, Russel, The CISSP Prep Guide: Gold Edition, Wiley Publishing Inc., 2003, Chapter 7: Application Controls, Figure 7.1 (page 360).

The Key Distribution Center (KDC) holds all users’ and services’ cryptographic keys. It provides authentication services, as well as key distribution functionality. The Authentication Service is the part of the KDC that authenticates a principal. The Key Distribution Service and Key Granting Service are distracters and are not defined Kerberos components. Source: WALLHOFF, John, CISSP Summary 2002, April 2002, CBK#1 Access Control System & Methodology (page 3)

Because scripts contain credentials, they must be stored in a protected area and the transmission of the scripts must be dealt with carefully. Operators might need access to batch files and scripts. The least privilege concept requires that each subject in a system be granted the most restrictive set of privileges needed for the performance of authorized tasks. The need-to-know principle requires a user having necessity for access to, knowledge of, or possession of specific information required to perform official tasks or services. Source: WALLHOFF, John, CISSP Summary 2002, April 2002, CBK#1 Access Control System & Methodology (page 3)

Systems accountability depends on the ability to ensure that senders cannot deny sending information and that receivers cannot deny receiving it. Because the mechanisms implemented in nonrepudiation prevent the ability to successfully repudiate an action, it can be considered as a preventive control. Source: STONEBURNER, Gary, NIST Special Publication 800-33: Underlying Technical Models for Information Technology Security, National Institute of Standards and Technology, December 2001, page 7.

Physical security and environmental security are part of operational controls, and are measures taken to protect systems, buildings, and related supporting infrastructures against threats associated with their physical environment. All the questions above are useful in assessing physical and environmental protection except for the one regarding processes that ensuring that unauthorized individuals cannot access information, which is more a production control. Source: SWANSON, Marianne, NIST Special Publication 800-26, Security Self-Assessment Guide for Information Technology Systems, November 2001 (Pages A-21 to A-24).