question about WFC Entity Declared

hi, i'm currently learning the XML 1.1 Specification,
04 February 2004.

I have a problem understanding the statement of
WFC Entity Declared.

A quote from this WFC :
"In a document without any DTD, a document with only an internal      DTD subset which contains no parameter entity references, or a       document with "standalone='yes'", for an entity reference that       does not occur within the external subset or a parameter entity,     the Name given in the entity reference MUST match that in an         entity declaration that does not occur within the external           subset or a parameter entity."

Does "parameter entity" in phrase :
" ... for an entity reference that does not occur within the   external subset or a parameter entity ..." and in phrase :
" ... entity declaration that does not occur within the external          subset or a parameter entity."
refers to both internal and external parameter entity ?

If it is true, then is it right that violation of this WFC
occurs when standalone="yes" and :  
   - there exists an entity-reference in document-content
     or in internal subset, and
   - that entity is declared in external subset or
     in parameter entity (internal / external) ?

I just want to make sure that my understanding of that WFC is
correct.

many thanks,

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