Mycoplasma a. lack peptidoglycan. b. are the smallest free-living organisms. c. have sterols in their membranes. d. are killed by penicillin. e. lack peptidoglycan, are the smallest free-living organisms and have sterols in their membranes.

E. lack peptidoglycan, are the smallest free-living organisms AND have sterols in their membranes.

Explanation:

Mycoplasmas are also called pleuropneumonia-like organisms (PPLO) are the smallest free-living, prokaryotic organisms. They do not have a cell wall and is bounded by a plasma membrane which contains sterol.

Since cell wall is absent in them, they lack peptidoglycan. These are present in animals, plants, insects, soil and sewage. They grow better in the aerobic environment but can also live as facultative anaerobes.  

Mycoplasma cause infection, affects cell metabolism, gene expression.