C is the correct answer.
User 1 has Read-only privileges to the entire Training folder. The only VM that he has Administrator Role privilege is the Dev01 inside the Test and Dev folder because direct Role overrules the Parent.
Per the VMware Data Center Virtualization training, "Permissions can propagate down the object hierarchy to all sub-objects, or it can apply only to an immediate object. Also, you can override permissions set at a higher level by explicitly setting different permissions for a lower-level object." The only option that satisfies this statement from VMware is C. I hope this helps.
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