In a patient with normal thyroid function, much of the circulating thyroxine (T4) is converted into a more potent hormone in target tissues. Which statement best describes this conversion?

T4 undergoes deiodination to form the more active hormone T3

T4 gains an additional iodine atom to increase receptor binding

T4 is phosphorylated inside the thyroid gland before secretion

T4 is converted directly into thyroid-stimulating hormone (TSH)