Which type of VHD file allows for dynamic allocation of physical disk space as virtual disk storage is utilized?

The type of VHD (Virtual Hard Disk) file that allows for dynamic allocation of physical disk space as virtual disk storage is utilized is the dynamically expanding VHD. This type of VHD begins with a small amount of physical disk space and grows in size as more data is written to it. This means that while the virtual disk can theoretically expand to a maximum size, it only consumes as much physical space on the host system's disk as actually needed for the data stored within it. This capability allows for efficient use of physical storage, especially in environments where storage capacity is a concern.

In contrast, fixed-size VHD files occupy the entire amount of space indicated by the virtual disk from the moment it is created, regardless of how much data is actually stored. This can lead to waste of physical disk space if the allocated size is not fully utilized.

Differencing VHDs function differently; they are used in conjunction with a parent VHD and are primarily utilized for capturing changes rather than managing space dynamically.

Snapshots are a feature related to the preservation of a virtual machine’s state at a particular moment and do not pertain to the allocation of disk space in the manner described in the question.

Thus, the dynamically expanding VHD is specifically designed to