A Layer 3 EtherChannel using an open-standard negotiation protocol requires LACP and a routed port- channel interface. LACP uses active and passive modes; active actively negotiates the bundle. PAgP modes such as auto and desirable are Cisco-proprietary, so they do not meet the open-standard requirement. Static mode on does not use a negotiation protocol at all, so it also fails the question wording. After the physical interface is placed into the channel group with mode active, the port-channel itself must be converted to a routed interface with no switchport and assigned an IP address. Cisco CCNA 200-301 v1.1 Network Access includes EtherChannel, and the important distinction is whether the bundle is Layer 2 or Layer 3. A Layer 2 EtherChannel uses switchport mode commands, often trunking. A Layer 3 EtherChannel behaves like a routed interface. Therefore, B selects LACP, and E creates the routed port-channel with IP addressing.