Your company needs to automate 3 logical layers of a large cloud deployment. You want to track this deployment’s evolution as it changes over time and carefully control any alterations. The deployment scripts should be version-controlled and managed in a GitHub repo. What is a good way to automate a stack to meet these requirements?

Answer options:

A.Use OpsWorks Stacks with three layers to model the layering in your stack.
B.Use CloudFormation Nested Stack Templates, with three child stacks to represent the three logical layers of your cloud.
C.Use AWS Config to declare a configuration set that AWS should roll out to your cloud.
D.Use Elastic Beanstalk Linked Applications, passing the important DNS entries between layers using the metadata interface.

Answer – B
As your infrastructure grows, common patterns can emerge in which you declare the same components in each of your templates. You can separate out these common components and create dedicated templates for them. That way, you can mix and match different templates but use nested stacks to create a single, unified stack. Nested stacks are stacks that create other stacks. To create nested stacks, use the AWS::CloudFormation::Stackresource in your template to reference other templates.
For more information on nested stacks, please visit the below URL:
http://docs.aws.amazon.com/AWSCloudFormation/latest/UserGuide/best-practices.html#nested
Note:
The query is, how you can automate a stack over the period of time, when changes are required, without recreating the stack.
The function of Nested Stacks is to reuse Common Template Patterns. 
For example, assume that you have a load balancer configuration that you use for most of your stacks. Instead of copying and pasting the same configurations into your templates, you can create a dedicated template for the load balancer. Then, you just use the resource to reference that template from within other templates. Yet another example is if you have a launch configuration with a certain specific configuration and you need to change the instance size only in the production environment and to leave it as it is in the development environment.
AWS also recommends that updates to nested stacks are run from the parent stack.
When you apply template changes to update a top-level stack, AWS CloudFormation updates the top-level stack and initiates an update to its nested stacks. AWS CloudFormation updates the resources of modified nested stacks, but does not update the resources of unmodified nested stacks.