By default, the install location for prerequisites of
.NET Framework 4 Client Profile (x86 and x64) is from the Microsoft web site, which requires the client network to be available during installation.
I am just wondering, is there a way that we can install
.NET Framework 4 Client Profile (x86 and x64) without downloading from the vendor's web site? I assume the second option, "Download prerequisites from the same location as my application", is something I should be looking at here. But I am not 100% sure.
Also, in which folder should I place the redistributable file,
Yes, you can select second option "Download prerequisites from the same location as my application" to install .NET Framework 4 Client Profile without downloading it from website. But you need to set path for that prerequisites as it done in below link.
Ref: Error_7_The install location for prerequisites has not been set to 'component vendor's web site' and the file 'DotNetFX40\dotNetFx40LP_Full_x86_x64fr.exe' in item 'Microsoft .NET Framework 4 (x86 and x64)' can not be located on disk.
UPDATE: You need to set below path for .NET Framework 4.0 Client Profile:
C:\Program Files\Microsoft SDKs\Windows\v7.0A\Bootstrapper\Packages\DotNetFX40Client\dotNetFx40_Client_x86_x64.exe
The common setup project and ClickOnce support .NetFX deployment. Have a look at MSDN page .NET Framework Deployment Guide for Developers.