The correct answer is to configure the ‘neighbor x.x.x.x update-source loopback0’ command under the BGP router configuration. This is necessary because BGP next-hop resolution for VPNv4 routes fails when the update source for the BGP session does not match the loopback address advertised into the IGP; without this command, BGP may use a physical interface IP as the source, which the remote PE’s OSPF route table does not recognize as the next-hop, causing the route to be considered unreachable. On the Cisco SPCOR 350-501 exam, this scenario tests your understanding of how BGP and the IGP interact in an MPLS L3VPN—specifically that the VPNv4 next-hop must be an IGP-reachable loopback for proper label switching. A common trap is forgetting that BGP defaults to the outgoing interface IP for TCP sessions, so even if the loopback is in OSPF, the next-hop won’t resolve unless update-source forces BGP to use that loopback. Memory tip: “Update the source to match the loopback, or the next-hop will lack a track.”
350-501 MPLS and Segment Routing Practice Question
This 350-501 practice question tests your understanding of mpls and segment routing. The scenario asks you to isolate a root cause — eliminate options that address a different problem before choosing. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A service provider is deploying MPLS L3VPN and notices that BGP next-hop resolution for VPNv4 routes fails on the PE routers. The PE routers are running OSPF as the IGP and have loopback interfaces used for LDP and BGP peering. Which configuration change should the engineer implement to ensure that the BGP next-hop is reachable?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Configure 'neighbor x.x.x.x update-source loopback0' under the BGP router configuration.
The BGP next-hop for VPNv4 routes is typically the loopback interface of the remote PE router. For BGP to consider the next-hop reachable, the local PE must have an IGP route to that loopback address. The 'neighbor x.x.x.x update-source loopback0' command ensures that BGP uses the loopback interface as the source IP for the TCP session, which aligns the BGP peering address with the IGP-advertised loopback, making the next-hop reachable via OSPF.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
✓
Configure 'neighbor x.x.x.x update-source loopback0' under the BGP router configuration.
Why this is correct
This ensures BGP uses the loopback as the source IP, making the next-hop reachable via IGP.
Related concept
Read the scenario before looking for a memorised answer.
✗
Configure 'neighbor x.x.x.x allowas-in 1' under the BGP VRF configuration.
Why it's wrong here
This allows AS path repetition, not next-hop resolution.
✗
Apply the 'neighbor x.x.x.x next-hop-self' command under the BGP VRF configuration.
Why it's wrong here
This command changes the next-hop to the PE but does not address reachability of the original next-hop.
✗
Increase the 'maximum-paths' value under the BGP address-family VPNv4.
Why it's wrong here
This affects multipath but not reachability.
Common exam traps
Common exam trap: answer the scenario, not the keyword
Cisco often tests the distinction between BGP session establishment (which requires reachability to the neighbor's IP) and BGP next-hop resolution (which requires reachability to the next-hop address carried in the route); candidates confuse these two separate requirements and incorrectly apply 'next-hop-self' or 'allowas-in'.
Trap categories for this question
Command / output trap
This command changes the next-hop to the PE but does not address reachability of the original next-hop.
Detailed technical explanation
How to think about this question
In MPLS L3VPN, BGP VPNv4 routes carry the next-hop as the remote PE's loopback address. The local PE must have an OSPF route to that loopback for BGP to install the route into the VRF. If the BGP session is sourced from a different interface (e.g., a physical interface), the next-hop may not match any IGP route, causing resolution failure. The 'update-source' command ensures the BGP session uses the loopback IP, which is always advertised into OSPF, guaranteeing reachability.
KKey Concepts to Remember
Read the scenario before looking for a memorised answer.
Find the constraint that changes the correct option.
Eliminate answers that are true in general but not in this case.
TExam Day Tips
→Watch for words such as best, first, most likely and least administrative effort.
→Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A network engineer at a university connects two campus buildings via a fibre link. Both routers run OSPF, but no adjacency forms — even though both routers can ping each other. The engineer finds one router is in area 0 and the other in area 1. OSPF adjacency requires matching area numbers, hello/dead timers, and network type. IP reachability alone is not enough.
What to study next
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
MPLS and Segment Routing — This question tests MPLS and Segment Routing — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Configure 'neighbor x.x.x.x update-source loopback0' under the BGP router configuration. — The BGP next-hop for VPNv4 routes is typically the loopback interface of the remote PE router. For BGP to consider the next-hop reachable, the local PE must have an IGP route to that loopback address. The 'neighbor x.x.x.x update-source loopback0' command ensures that BGP uses the loopback interface as the source IP for the TCP session, which aligns the BGP peering address with the IGP-advertised loopback, making the next-hop reachable via OSPF.
What should I do if I get this 350-501 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Question Discussion
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