Terraform stores the value of an output in its state file, even if the sensitive...

Detailed Explanation:

Rationale for Correct Answer: Marking an output as sensitive = true hides the value from normal CLI output, but it does not prevent Terraform from storing the value in the state file. Terraform state can still contain sensitive values in plaintext, depending on the backend and provider behavior.

Analysis of Incorrect Options (Distractors):

B. False. Incorrect. The sensitive argument affects display behavior, not whether the value is stored in state.

Key Concept: Sensitive values are still stored in Terraform state and must be protected.