In the context of human development, Woodworth's famous equation $D = (H \times E)$ shows that development is the product of heredity and environment. Analysing this conceptual framework deeply, which of the following statements most accurately explains the interaction of these two factors in development?

Development is a continuous process in which both heredity and environment have a combined contribution. Heredity provides potential capabilities to an individual, while the environment provides the opportunity to turn those potentials into reality. In other words, heredity sets the limits and the environment determines the actual level of development within those limits.