The lo0 interface with its assigned IP address acts as the VXLAN Tunnel Endpoint (VTEP), enabling VXLAN encapsulation within the ACI fabric. Thus, the answer is B. Fabric.
The loopback interface (lo0) is the VTEP, not the PTEP. The PTEP refers to the physical interfaces (e.g., eth1/49, eth1/50) that carry VXLAN traffic over the fabric underlay.
• PTEP: The physical interface on which VXLAN traffic flows.
• VTEP (lo0): The logical representation of the VXLAN endpoint, using the loopback interface for encapsulation/decapsulation.
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