350-501 MPLS and Segment Routing Practice Question
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?
⚠ Common exam trap
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'.
Answer choices
Why each option matters
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.
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.
- ✗
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.
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JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This 350-501 practice question is part of Courseiva's free Cisco certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the 350-501 exam.