The correct answer is option (1) as Phylum Chordata is divided into three subphyla: Urochrodata, Cephalochordata and Vertebrata. The members of subphylum Vertebrata possess notochord during the embryonic period. The notochord is replaced by a cartilaginous or bony vertebral column in the adult. Thus, all vertebrates are chordates but all chordates are not vertebrates.