You have the Azure virtual networks shown in the following table. To which virtual networks can you establish a peering connection from VNet1? ...

Address spaces must not overlap to enable VNet Peering.
Incorrect Answers:
A, B, D: The address space for VNet2 overlaps with VNet1. We therefore cannot establish a peering between VNet2 and VNet1.
Reference:
https://docs.microsoft.com/en-us/azure/virtual-network/tutorial-connect-virtual-networks-portal
https://docs.microsoft.com/en-us/azure/virtual-network/virtual-networks-faq#vnet-peering