SC-900 Microsoft Security Compliance and Identity Fundamentals Free Practice Exam Questions (2025 Updated)

Azure AD Privileged Identity Management (PIM) provides just-in-time privileged access to Azure AD and Azure resources

In Microsoft identity architecture, federation establishes trust between different identity providers to enable single sign-on (SSO) across organizational and platform boundaries. Microsoft Learn explains that federation uses standards such as SAML, WS-Federation, and OpenID Connect/OAuth 2.0 so a user can authenticate with their home identity provider and obtain tokens that are accepted by a relying party (the application or service). This trust relationship lets organizations share identities securely without copying passwords or synchronizing credentials, providing a seamless sign-in experience across multiple systems and clouds.

By contrast, Active Directory Domain Services (AD DS) and a domain controller provide on-premises directory and authentication services primarily within a single Windows domain/forest using Kerberos/NTLM, not cross-provider SSO on their own. Microsoft Entra Privileged Identity Management (PIM) manages just-in-time, approval-based elevation for roles and does not deliver SSO capabilities. Therefore, the technology explicitly intended to provide SSO across multiple identity providers is federation.

In Microsoft Sentinel, automation is delivered through playbooks, which are built on Azure Logic Apps. Microsoft’s Sentinel documentation explains that playbooks “help automate and orchestrate your response to threats” and can be triggered by analytics alerts or incidents to run predefined actions. Typical automated tasks include “enriching alerts with data, blocking IP addresses, disabling users, or creating tickets,” allowing security teams to standardize and speed up their response and remediation processes. Sentinel also uses automation rules to decide when a playbook should run (for example, on incident creation or update), enabling consistent handling of common SOC tasks.

By contrast, the other options are not intended for automation: deep investigation tools are used to investigate incidents and entities; hunting search-and-query tools (built on KQL) are for proactive threat hunting rather than automating responses; and workbooks provide dashboards and visualizations for monitoring and reporting. Therefore, when the requirement is to automate common tasks—such as triggering actions across Microsoft 365 Defender, Azure, or third-party systems—the correct Sentinel capability is playbooks powered by Logic Apps. This aligns with the SCI guidance that emphasizes using Sentinel playbooks to “automate common workflows and response actions” and reduce manual effort while improving consistency and speed in security operations.

Microsoft’s identity guidance for Azure resources states there are two kinds of managed identities: system-assigned and user-assigned. The documentation describes that a system-assigned identity is scoped to a single resource and follows its lifecycle: “A system-assigned managed identity is created in Microsoft Entra ID and is tied to the lifecycle of that Azure service instance. When the resource is deleted, Azure automatically deletes the identity.” By contrast, a user-assigned identity is reusable across resources: “A user-assigned managed identity is a standalone Azure resource… It can be assigned to one or more Azure service instances and is managed independently of the resources that use it.”

Because the scenario requires multiple Azure web apps to use the same identity, the only managed identity type that supports this sharing model is the user-assigned managed identity. This allows you to grant RBAC permissions once to the identity and then attach that same identity to several App Service instances, simplifying secretless access to Azure resources (Key Vault, Storage, SQL, etc.) and providing centralized lifecycle and rotation management. Certificates or generic service principals would reintroduce credential management, while a system-assigned identity cannot be shared across multiple apps. Therefore, a user-assigned managed identity is the correct choice.

According to Microsoft’s Security, Compliance, and Identity (SCI) documentation and learning paths (specifically SC-900, SC-300, and Azure AD Identity Protection modules):

“Conditional Access policies in Azure AD are the primary method for enforcing access controls based on specific conditions such as user, group, location, device compliance, and application.”

In this case, the organization can configure a Conditional Access policy that targets a specific Azure AD group and requires MFA as a condition before access is granted. The typical policy setup includes:

Assignments: Target users or groups (e.g., “Finance Department Users”).

Cloud apps or actions: Specify which applications or services are protected (e.g., Microsoft 365).

Access controls: Set the control to “Require multi-factor authentication.”

Microsoft’s SCI training materials further state:

“Conditional Access enables administrators to enforce MFA for specific users, groups, or scenarios. It provides flexibility to protect access without enabling MFA globally for all users.”

Other options explained:

Azure Policy (A) applies to Azure resources, not user authentication.

Communication compliance policy (B) monitors message content for compliance violations.

User risk policy (D) is part of Azure AD Identity Protection, enforcing MFA based on detected user risk levels, not group membership.

Therefore, the verified and correct answer is: ✅ C. a Conditional Access policy.

In the Microsoft Cloud Adoption Framework (CAF) for Azure, the methodology is organized into sequential stages that guide an organization from initial intent through operations. Microsoft describes the flow as: “Strategy → Plan → Ready → Adopt → Govern → Manage.” The guidance explains that before building landing zones or preparing environments (Ready), organizations should complete the Strategy and Plan work. Microsoft states that the framework “helps you create and align your business strategy, define business outcomes, and justify cloud adoption” in the Strategy stage; then, in Plan, you “translate that strategy into an actionable adoption plan, rationalize portfolios, and prepare a cloud adoption backlog.” Only after these two stages does the Ready phase occur, where you “prepare your cloud environment (landing zone) to host the workloads.”

Additionally, CAF emphasizes that Govern and Manage are ongoing disciplines that operate alongside and after adoption rather than preceding Ready: “Govern and Manage provide iterative guardrails and operational baselines that evolve as you adopt more workloads.” Therefore, the two phases addressed before the Ready phase are Define Strategy and Plan, aligning with Microsoft’s prescribed order and intent of the Cloud Adoption Framework methodology.

Microsoft describes Identity Protection as a capability that “detects risky users and risky sign-ins using real-time and offline detections and allows you to configure automated responses.” Microsoft is explicit that detections aren’t limited to after authentication; rather, signals are evaluated during sign-in and also by offline analytics, where “some detections are offline and can take up to 48 hours to appear.” Therefore, saying it only “generates risk detections once a user is authenticated” is incorrect.

For risk scoring, Microsoft states that Identity Protection “assigns a risk level to each detection,” and that “risk levels are Low, Medium, or High,” which are then used by user-risk and sign-in-risk policies to drive remediation (for example, requiring password change or MFA).

Microsoft also defines the two core risk concepts: “User risk represents the probability that a given identity or account is compromised,” while “Sign-in risk represents the probability that a given authentication request isn’t authorized by the identity owner.” These definitions underpin Conditional Access and Identity Protection policies that can require additional verification or block access based on the assessed risk.

Taken together, the documentation confirms: detections are not restricted to post-authentication (No), detections carry Low/Medium/High levels (Yes), and user risk is the probability the identity is compromised (Yes).

Box 1: Yes

Azure Defender provides security alerts and advanced threat protection for virtual machines, SQL databases, containers, web applications, your network, your storage, and more

Box 2: Yes

Cloud security posture management (CSPM) is available for free to all Azure users.

Box 3: Yes

Azure Security Center is a unified infrastructure security management system that strengthens the security posture of your data centers, and provides advanced threat protection across your hybrid workloads in the cloud - whether they're in Azure or not - as well as on premises.

Microsoft Defender for Identity (formerly Azure Advanced Threat Protection, also known as Azure ATP) is a cloud-based security solution that leverages your on-premises Active Directory signals to identify, detect, and investigate advanced threats, compromised identities, and malicious insider actions directed at your organization.

Microsoft’s hybrid identity guidance explains that Microsoft Entra Connect (formerly Azure AD Connect) is the tool used to synchronize identities from on-premises AD DS to a Microsoft Entra tenant, enabling hybrid identity. Microsoft states that hybrid identity is achieved by connecting your on-premises directory with your cloud directory so users have a single identity to access both environments. This does not require two Microsoft 365 tenants; rather, it requires one Microsoft Entra tenant integrated with your on-premises AD DS. For authentication models—Password Hash Synchronization (PHS), Pass-through Authentication (PTA), or federation (AD FS)—Microsoft specifies that directory synchronization is required so that user objects exist in Entra ID and can authenticate to cloud services while maintaining a consistent identity. Thus, Entra Connect is used to implement the synchronization underpinning hybrid identity; two M365 tenants are unnecessary; and synchronization between AD DS and Entra ID is required for authenticating hybrid identities across Microsoft cloud services.

Microsoft’s SCI guidance defines the supported passwordless methods in Entra ID (Azure AD). The documentation states: “Microsoft recommends three passwordless authentication options: Windows Hello for Business, FIDO2 security keys, and the Microsoft Authenticator app (phone sign-in).” Windows Hello for Business “replaces passwords with strong two-factor authentication on Windows devices,” allowing users to sign in with a gesture (biometric or PIN) that does not require a password during interactive sign-in. Likewise, “FIDO2 security keys enable users to sign in using an external security key,” providing a standards-based passwordless credential that can work across supported browsers and devices.

By contrast, OATH software tokens (for example, time-based one-time passcodes in an authenticator app) are documented as multifactor verification methods: “OATH software tokens generate time-based codes used for MFA.” These OTP codes serve as a second factor and are not a passwordless primary sign-in method; users typically still enter a password and then the OTP. Therefore: software tokens → No (not passwordless), Windows Hello → Yes, FIDO2 security keys → Yes. This mapping aligns directly with Microsoft’s Entra ID passwordless authentication guidance and the delineation between passwordless sign-in and MFA second-factor methods.

Microsoft’s SCI/Learn content describes Azure AD (now Microsoft Entra ID) as a cloud service, not something you install on-premises. The docs state Azure AD is a “cloud-based identity and access management service” that “helps your employees sign in and access resources.” This clarifies the third statement (IAM service) as Yes, and the first statement (on-premises deployment) as No, because the native on-prem directory is Windows Server Active Directory, whereas Azure AD runs in Microsoft’s cloud and can be synchronized with on-prem AD via tools like Azure AD Connect.

Microsoft also explains licensing/availability: the service comes in several editions, and the free/Office 365 tier is included with many suites. The documentation explicitly notes that Azure AD is “included with subscriptions such as Microsoft 365” (formerly Office 365) and provides tenant-wide identity for those services. Therefore, stating that Azure AD is provided as part of a Microsoft 365 subscription is Yes.

In summary: Azure AD/Entra ID is a cloud identity and access management platform; it’s not deployed on-premises, and Microsoft 365 subscriptions include an Azure AD tenant/edition to manage users, groups, apps, and access policies.

In Microsoft Entra ID (Azure AD), Conditional Access is the policy engine that evaluates signals about the user, device, app, and session to determine whether to grant access and under what conditions. Microsoft’s guidance explains that Conditional Access is “the tool used by Azure AD to bring signals together, make decisions, and enforce organizational policies.” In device-centric scenarios, Conditional Access integrates with Microsoft Intune device compliance so you can enforce controls such as “Require device to be marked as compliant” or “Require approved client app” before granting access to corporate resources like Microsoft 365 and Azure apps. This allows organizations to block or limit access from unmanaged or noncompliant devices, and to allow access only from devices that meet your compliance policies (encryption, OS version, jailbreak/root status, etc.).

By contrast, Network Security Groups (NSGs) filter traffic at the virtual network/subnet/NIC level and are not identity-aware; Privileged Identity Management (PIM) governs just-in-time elevation and access reviews for privileged roles; and resource locks prevent accidental deletion or modification of Azure resources. Therefore, the Azure AD feature specifically designed to restrict access by Intune-managed device state and enforce device-based access conditions to corporate resources is Conditional Access.

authorization

In the context of Microsoft identity and access management, when users attempt to access an application or a service, authorization is what controls their level of access. This concept is clearly defined in Microsoft’s Security, Compliance, and Identity (SCI) learning paths, particularly in SC-900 and SC-300 certifications.

From Microsoft SCI training materials:

“Authentication is the process of verifying the identity of a user, while authorization is the process of determining what resources a user can access and what actions they are permitted to perform.”

In more detail:

Authentication confirms who you are (e.g., verifying credentials through Azure AD, MFA).

Authorization decides what you can do (e.g., access to files, roles, permissions in an app or service).

SCI documentation explains:

“Once authentication is successful, authorization policies are applied to determine whether the authenticated user is allowed to access the requested resource and at what level.”

This principle is implemented using role-based access control (RBAC) in Microsoft Azure and Microsoft 365 environments. For example, even if a user successfully logs into the Microsoft 365 portal (authentication), their ability to manage Exchange Online settings or view compliance data depends on their assigned roles (authorization).

Microsoft states that Azure Bastion is a fully managed PaaS service that provides “secure and seamless RDP/SSH connectivity to your virtual machines directly in the Azure portal over SSL” and “eliminates the need to expose public IP addresses on your VMs.” With Bastion, users open the VM blade in the Azure portal and launch an in-browser RDP or SSH session; no separate RDP or SSH client is required because the session is proxied through Bastion using HTTPS/TLS. The platform is designed to be agentless and browser-based, providing connectivity without VPN or jump hosts and enforcing least-exposure by keeping management ports off the internet. While traditional tools such as Remote Desktop Connection or an SSH client are common for direct access, Bastion’s prescribed access method in Microsoft guidance is to initiate the session from the Azure portal. PowerShell remoting is unrelated to Bastion’s web-based brokering. Therefore, to connect to an Azure virtual machine by using Azure Bastion, you use the Azure portal.

In Microsoft 365 compliance, sensitivity labels (Microsoft Purview Information Protection) are the feature designed to classify and automatically protect data. Microsoft states that sensitivity labels “let you classify and protect your organization’s data” and that a label “can apply protection settings such as encryption” to files and emails. Labels can be deployed so that protection is applied without user action: Microsoft explains that labels “can be applied automatically, recommended, or by users,” and that administrators can “auto-apply a sensitivity label to content in SharePoint, OneDrive, and Exchange based on conditions such as sensitive info types, keywords, or trainable classifiers.” When a label with protection is applied, “encryption settings travel with the content” and enforce usage rights like who can open, print, or forward, even outside the organization.

By contrast, Content Search and eDiscovery are discovery/investigative tools and do not enforce protection. Retention policies manage how long content is kept or deleted, but they don’t encrypt content. Therefore, the Microsoft 365 compliance capability that encrypts content automatically based on specific conditions is sensitivity labels with auto-labeling policies in Microsoft Purview.

Microsoft Entra ID Identity Protection is a risk-based conditional access capability that “automates the detection and remediation of identity-based risks” and enables admins to investigate risky users and sign-ins. SCI guidance explains that Identity Protection evaluates signals such as user risk and sign-in risk, raises risk detections, and can automatically remediate by enforcing actions like password reset or blocking access via risk-based policies. The portal provides rich investigation experiences for risky users, risky sign-ins, and risk detections, allowing security teams to review evidence and confirm/dismiss risks. In addition, identity risk data can be exported through Azure Monitor/diagnostic settings and integrated with SIEM/SOAR tools, enabling “export of risk detections and security alerts to third-party solutions” for correlation and response. Tasks such as configuring external access for partner organizations are handled by B2B collaboration features, and creating/assigning sensitivity labels belongs to Microsoft Purview Information Protection—not Identity Protection. Therefore, the tasks Identity Protection supports are: export risk detection (B), automate detection and remediation of identity-based risks (C), and investigate risks related to user authentication (D).

eDiscovery

In Microsoft Purview, eDiscovery is the purpose-built compliance solution for legal and investigative workflows. Microsoft’s SCI materials describe eDiscovery as the tool that enables organizations to identify, preserve/hold, collect, review, and export potentially relevant content across Microsoft 365 services. Official guidance explains that eDiscovery (Standard) “provides search, hold, and export capabilities” for content in Exchange, SharePoint, OneDrive, Teams, and more. Another description states that eDiscovery (Premium) helps you “identify, preserve, collect, review, analyze, and export content” for legal matters and internal investigations. These capabilities are designed to support the eDiscovery lifecycle by allowing admins and case managers to: create cases, define custodians and non-custodial data sources, run targeted searches, apply legal holds to prevent data alteration or deletion, perform review and analytics, and export responsive data packages for counsel or regulators.

By contrast, Data Loss Prevention (DLP) protects sensitive information from accidental or inappropriate sharing; Customer Lockbox governs Microsoft engineer access to your data for support; and resource locks protect Azure resources from accidental deletion or modification. Therefore, the Microsoft SCI control that is explicitly used to identify, hold, and export electronic information for an investigation is Microsoft Purview eDiscovery.

In Microsoft Purview eDiscovery, to search, preserve, analyze, and export content, you must first create a case. A case acts as a container for all eDiscovery activities, including placing users and content locations on litigation hold, running content searches, and exporting results for legal or compliance review.

SCI Extract: "Cases are used in Microsoft Purview eDiscovery (Standard and Premium) to manage, organize, and execute the various tasks associated with identifying and delivering content during an investigation or litigation."