Refer to the exhibit.

What is the consequence of configuring peer-gateway on the two vPC peers N7K-1 and N7K-2?

A.
Nothing, this is the standard vPC configuration to make the feature work.

B.
The downstream device detects only one of the vPC peers as its gateway.

C.
The downstream device can use DMAC of N7K-1 on the link to N7K-2, and N7K-2 forwards the
packet.

D.
This configuration enables the downstream device to use DHCP to obtain its default gateway.

Explanation:
Beginning with Cisco NX-OS 4.2(1), you can configure vPC peer devices to act as the gateway even
for packets that are destined to the vPC peer device’s MAC address. Use the peer-gateway command
to configure this feature.
Some network-attached storage (NAS) devices or load-balancers may have features aimed to
optimize the performances of particular applications. Essentially these features avoid performing a
routing-table lookup when responding to a request that originated form a host not locally attached
to the same subnet. Such devices may reply to traffic using the MAC address of the sender Cisco
Nexus 7000 device rather than the common HSRP gateway. Such behavior is non-complaint with
some basic Ethernet RFC standards. Packets reaching a vPC device for the non-local router MAC
address are sent across the peer-link and could be dropped by the built in vPC loop avoidance
mechanism if the final destination is behind another vPC.
The vPC peer-gateway capability allows a vPC switch to act as the active gateway for packets that are
addressed to the router MAC address of the vPC peer. This feature enables local forwarding of such
packets without the need to cross the vPC peer-link. In this scenario, the feature optimizes use of the
peer-link and avoids potential traffic loss.
Configuring the peer-gateway feature needs to be done on both primary and secondary vPC peers
and is non-disruptive to the operations of the device or to the vPC traffic. The vPC peer-gateway
feature can be configured globally under the vPC domain submode.
When enabling this feature it is also required to disable IP redirects on all interface VLANs mapped
over a vPC VLAN to avoid generation of IP redirect messages for packets switched through the peer
gateway router. When the feature is enabled in the vPC domain, the user is notified of such a
requirement through an appropriate message.
Packets arriving at the peer-gateway vPC device will have their TTL decremented, so packets carrying
TTL = 1 may be dropped in transit due to TTL expire. This needs to be taken into account when the
peer-gateway feature is enabled and particular network protocols sourcing packets with TTL = 1
operate on a vPC VLAN.

http://www.cisco.com/c/en/us/td/docs/switches/datacenter/sw/4_2/nxos/interfaces/configuration/guide/if_nxos/if_vPC.html