VM templates in Nutanix are supported only when the VM's disks reside on storage containers configured with Replication Factor 2 (RF2) or higher. * Option C (VM has disks on RF2 containers) is correct: * VM templates requirea minimum RF2 for fault tolerance. * RF1 containers do not meet Nutanix best practices for VM templates. * Option A is incorrect: * VMs protected by Protection Domains can be cloned, but this is different from creating a VM template. * Option B is incorrect: * Agent VMs (e.g., Witness VMs) or Prism Central cannot be used as VMtemplates. * Option D is incorrect: * Nutanix VM templates are natively supported on AHV, not ESXi. References: * Nutanix VM Management Guide#Creating and Managing VM Templates * Nutanix KB#Storage Requirements for VM Templates