Correct Answer: C
The AWS Documentation mentions the following.
The Amazon EC2 instances you launch into a nondefault VPC are private by default. They`re not assigned a public IPv4 address unless you specifically assign one during launch or you modify the subnet`s public IPv4 address attribute. By default, all instances in a nondefault VPC receive an unresolvable hostname that AWS assigns (for example, ip-10-0-0-202). You can assign your own domain name to your instances and use up to four of your own DNS servers. To do that, you must specify a special set of DHCP options to use with the VPC.Option A is incorrect since you need to create a Private hosted zone for routing DNS names local to the VPC.Option B is incorrect since you would need to manage the replication between DNS servers.
Option D is incorrect since the resolution is based on Amazon DNS servers.
For more information on the DHCP options set, please refer to the below URL-
https://docs.aws.amazon.com/AmazonVPC/latest/UserGuide/VPC_DHCP_Options.html