The correct answer is D. Create an instance template and a managed instance group. Configure two separate internal TCP/UDP load balancers for each protocol (TCP/UDP), and configure the client VMs to use the internal load balancers' virtual IP addresses.
This answer is based on the following facts:
Using multi-NIC VMs as network virtual appliances (NVAs) allows you to route traffic between different VPC networks1. You can use NVAs to implement custom network policies and security requirements.
Using an instance template and a managed instance group allows you to create and manage multiple identical NVAs2. You can also use health checks and autoscaling policies to ensure high availability and reliability of your NVAs.
Using internal TCP/UDP load balancers allows you to distribute traffic from client VMs to NVAs based on the protocol and port3. You can also use health checks and failover policies to ensure that only healthy NVAs receive traffic.
Configuring the client VMs to use the internal load balancers' virtual IP addresses allows you to simplify the routing configuration and avoid manual intervention4. You do not need to create static routes or update them when NVAs are added or removed.
The other options are not correct because:
Option A is not suitable. Creating the VMs in the same zone does not provide high availability or failover. Using static routes with IP addresses as next hops requires manual intervention when NVAs are added or removed.
Option B is not optimal. Creating the VMs in different zones provides high availability, but not failover. Using static routes with instance names as next hops requires manual intervention when NVAs are added or removed.
Option C is not feasible. Creating an instance template and a managed instance group provides high availability and reliability, but using a single internal load balancer does not support both TCP and UDP protocols. You cannot define a custom static route with an internal load balancer as the next hop.