Virtual machine (VM) A is connected to virtual switch A, and VM B is connected to virtual switch B.

Which statement is true about the network traffic between A and B?

A.
Traffic between VM A and VM B stays within ESX Server.

B.
Traffic between VM A and VM B flows through the physical NIC.

C.
VM A can communicate with VM B if they have same port group policies.

D.
VM A can communicate with VM B if they have same security policies.

Explanation:
VMware Virtual Networking Concepts, page 5.

Network traffic cannot flow directly from one virtual switch to another virtual switch within the same host.
Therefore an external switch is required.