Word formation in English involves processes such as affixation, compounding, and conversion. Understanding how bound morphemes change the grammatical category of a word is essential for vocabulary development. Analyze the following statements:

I.Derivational suffixes like "-ly" often change adjectives into adverbs, modifying the syntactic function of the base word.

II.Inflectional morphemes in English, such as the "-ed" in "walked," change the core meaning of the verb to create an entirely new lexical entry.

III.Compounding is the process of combining two free morphemes to create a new word, which can be written as one word, two words, or hyphenated.

Which statements are correct: