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An isolated system is defined as a system that does not exchange either matter or energy with its surroundings. This characteristic is fundamental to the concept of thermodynamics, specifically when discussing the conservation of energy and mass. By not allowing any exchange, an isolated system maintains a constant total energy and mass, which is crucial for understanding various physical processes and reactions occurring within the system. This characteristic helps in formulating laws such as the first law of thermodynamics, which states that energy cannot be created or destroyed in an isolated system.

In contrast, the other options describe scenarios that involve some form of transfer, whether it is energy only, matter only, or a combination – none of which align with the defining feature of an isolated system. The essence of an isolated system lies in its strict boundaries that prevent any transfers, which directly leads to the conclusion that no matter or energy can transfer.