'On the first day of every month at midnight' = Scheduled scaling policy

By configuring a scheduled scaling policy, the EC2 Auto Scaling group can proactively launch additional EC2 instances before the CPU utilization peaks to 100%. This will ensure that the application can handle the workload during the month-end financial calculation batch, and avoid any disruption or downtime. Configuring a simple scaling policy based on CPU utilization or adding Amazon CloudFront distribution or Amazon ElastiCache will not directly address the issue of handling the monthly peak workload.

If the scaling were based on CPU or memory, it requires a certain amount of time above that threshhold, 5 minutes for example. That would mean the CPU would be at 100% for five minutes.

C: Configure an EC2 Auto Scaling scheduled scaling policy based on the monthly schedule is the best option because it allows for the proactive scaling of the EC2 instances before the monthly batch run begins. This will ensure that the application is able to handle the increased workload without experiencing downtime. The scheduled scaling policy can be configured to increase the number of instances in the Auto Scaling group a few hours before the batch run and then decrease the number of instances after the batch run is complete. This will ensure that the resources are available when needed and not wasted when not needed. The most appropriate solution to handle the increased workload during the monthly batch run and avoid downtime would be to configure an EC2 Auto Scaling scheduled scaling policy based on the monthly schedule.

C is the correct answer as traffic spike is known

ANSWER - C https://docs.aws.amazon.com/autoscaling/ec2/userguide/ec2-auto-scaling-scheduled-scaling.html

C as the schedule of traffic spike is known beforehand.