Which statement is correct about IP-IP tunnels?

IP-IP tunnels are a type of tunnels that use IP as both the encapsulating and encapsulated protocol. IP-IP tunnels are simple and easy to configure, but they do not provide any security or authentication features. IP-IP tunnels only support encapsulating IP traffic, which means that the payload of the inner packet must be an IP packet. IP-IP tunnels cannot encapsulate non-IP traffic, such as Ethernet frames or MPLS labels1.

Option A is correct, because IP-IP tunnels only support encapsulating IP traffic. Option B is incorrect, because IP-IP tunnels only support encapsulating non-IP traffic. Option C is incorrect, because the TTL in the inner packet is not decremented during transit to the tunnel endpoint. The TTL in the outer packet is decremented by each router along the path, but the TTL in the inner packet is preserved until it reaches the tunnel endpoint2. Option D is incorrect, because there are 20 bytes of overhead with IP-IP encapsulation. The overhead consists of the header of the outer packet, which has a fixed size of 20 bytes for IPv43.

References:

1: IP-IP Tunneling 2: What is tunneling? | Tunneling in networking 3: IPv4 - Header