Your network contains an Active Directory domain named contoso.com.
An organizational unit (OU) named OU1 contains user accounts and computer accounts.
A Group Policy object (GPO) named GP1 is linked to the domain.GP1 contains Computer
Configuration settings and User Configuration settings.
You need to prevent the User Configuration settings in GP1 from being applied to users. The solution
must ensure that the Computer Configuration settings in GP1 are applied to all client computers.
What should you configure?

A.
The GPO Status
B.
The Block Inheritance feature
C.
The Group Policy loopback processing mode
D.
The Enforced setting
Explanation:
A loopback with merge option needs to be used.
A
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A definitely.
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A for sure
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It is A, and definitely not C. Let’s look at it in the simplest terms possible:
GP1 is linked to the domain, thus, it will apply to OU1 (where there are users and computers). You need GP1’s computer settings to apply, but not its user settings.
A.
The GPO Status – You can disable the user settings, so that it is applying just computer settings. This meets the requirement of applying the computer settings still, but not applying the user settings of GP1 to users. Thus, A is correct.
B.
The Block Inheritance feature – If you block the inheritance of GP1, the user settings will not apply to the users, but it will also keep the computer settings from applying. Thus, B is incorrect.
C.
The Group Policy loopback processing mode – If you use group policy loopback processing you have two choices: merge and replace. If you use merge the user settings will still apply to users, but with merge with user settings from other GPOs. If you instead choose replace, the user settings of GP1 will replace any user settings from another GPO that applies to users. Either way, the user settings of GP1 are still applying to users. Thus, C is incorrect.
D.
The Enforced setting – This will enforce the group policy of GP1 and keep it from being overruled by another group policy. Thus, D is incorrect.
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The correct answer is indeed C
https://support.microsoft.com/en-us/kb/231287
You got the merge description mixed up, here’s what the link says.
Merge Mode
In this mode, when the user logs on, the user’s list of GPOs is typically gathered by using the GetGPOList function. The GetGPOList function is then called again by using the computer’s location in Active Directory. The list of GPOs for the computer is then added to the end of the GPOs for the user. This causes the computer’s GPOs to have higher precedence than the user’s GPOs.
Check the last line.
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thx!!!!!!
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After reading this I would have to agree with everyone
https://technet.microsoft.com/en-us/library/cc733163.aspx
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Absolutely no doubt that it is A, chaserZX explained it spot on.
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All Heil the Chaser
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GPO Status:
https://social.technet.microsoft.com/Forums/getfile/104008
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