The correct answer is C: Redeploy VM1 and VM2 to the same availability set. For a Basic Load Balancer, the backend pool endpoints must consist of virtual machines within a single availability set or within a virtual machine scale set. It is not possible to add an existing VM to an availability set after it has been created without redeploying it. Although moving VM2 to the same subnet would be a necessary step if the Load Balancer allowed it, the primary requirement of being part of the same availability set takes precedence.