Where is the choice for "None of these"?
I made it a point very early to tell my kids the truth, period, and to encourage everyone else to do so, as well. Age-appropriately, of course, so when my then-6-year-old asked about sex, she got an answer that would make sense and not scandalize anyone when (not if) it was repeated to the neighbor kids.
And yes, that includes blowing the whistle on Santa Claus, the Easter Bunny, the Tooth Faery, honest politicians, and other fictional characters. She's grown up a happy atheist, with a nice, functional baloney detector, as a result.