Knights always tell the truth but knaves never tell the truth. In a group of three individuals (who we will label as #1, #2, and #3) each is either a knight or a knave. Each makes a statement:
#1: "We are all three knaves." #2: "Two of us are knaves and one of us is a knight." #3: "I am a knight and the other two are knaves."
Which are knights and which are knaves? Explain your reasoning.