A company built a new application in the AWS Cloud.

This solution meets the requirements in the most secure way because it uses a service that is integrated with CloudFormation to manage sensitive data in encrypted form. AWS Systems Manager Parameter Store provides secure, hierarchical storage for configuration data management and secrets management. You can store sensitive data as secure string parameters, which are encrypted using an AWS Key Management Service (AWS KMS) key of your choice. You can also use dynamic references in your CloudFormation templates to specify template values that are stored in Parameter Store or Secrets Manager without having to include them in your templates. Dynamic references are resolved only during stack creation or update operations, which reduces exposure risks for sensitive data. Putting sensitive data into a CloudFormation parameter will not encrypt them or protect them from unauthorized access. Putting sensitive data into an Amazon S3 bucket or Amazon Elastic File System (Amazon EFS) will require additional configuration and integration with CloudFormation and may not provide fine-grained access control or encryption for sensitive data.