Which of the following regarding branchial cyst is true?
BRANCHIAL CYST

It arises from the remnants of second branchial cleft. Normally, 2nd, 3rd, 4th clefts disappear to form a smooth neck. Persistent 2nd cleft is called as cervical sinus (of His) which eventually gets sequestered to form branchial cyst. 
Six branchial arches with five pharyngeal pouches (endoderm lining) inside and five pharyngeal clefts (ectoderm lining) outside are present. 
Swelling in the neck beneath the anterior border of upper third of the sternomastoid muscle. It is smooth, soft, fluctuant, often transilluminant with a sensation of ‘Half-filled double hot water bottle’.
It is equal in both sexes. Even though congenital, it is seen in late adolescents and early 3rd decade.
In 3% cases, it is bilateral; it can be familial also.
Usually painless unless it is infected. 
It contains cholesterol crystals which is from the lining of mucous membrane which contains sebaceous gland. Cheesy toothpaste like material is typical.
Histologically, it is lined by squamous epithelium. Occasionally it contains ciliated columnar epithelium. Cyst wall shows plenty of lymphoid tissue. 

Key Concept:
Histologically, it is lined by squamous epithelium. Occasionally it contains ciliated columnar epithelium. Cyst wall shows plenty of lymphoid tissue. Epithelial infusion within lymph node may be the  cause as branchial cyst contains lymphoid tissues in their wall. 
Reference: SRB's Manual of Surgery, 5th ed, page no 431
Seen deep to lower 1/3rd of sternocleidomastoid
Wall consists of lymphoid tissue
Filled with keratinized fluid
Presents at birth