- A
AWS KMS with automatic key rotation
Why wrong: AWS KMS uses shared, multi-tenant HSMs managed by AWS, not a dedicated HSM under the customer's sole control. Automatic key rotation does not address the requirement for a dedicated HSM.
- B
AWS Certificate Manager (ACM)
Why wrong: ACM is used for provisioning, managing, and deploying SSL/TLS certificates for use with AWS services. It does not provide dedicated HSM storage for encryption keys used in S3 server-side encryption.
- C
AWS CloudHSM
CloudHSM provides a dedicated HSM appliance that runs in the customer's VPC. The customer has exclusive control over the HSM and the keys it contains, meeting the PCI DSS requirement for a dedicated HSM under sole control.
- D
AWS Secrets Manager
Why wrong: Secrets Manager is designed for securely storing and managing secrets such as database credentials and API keys. It does not provide dedicated HSM hardware for encryption key storage used with S3.
Quick Answer
The answer is AWS CloudHSM, the correct choice because it provides a dedicated hardware security module (HSM) under your sole control, exactly as PCI DSS mandates for storing encryption keys that protect cardholder data. Unlike AWS KMS, which is a shared multi-tenant service, CloudHSM gives you a single-tenant, FIPS 140-2 Level 3 validated appliance where you generate and manage your own keys, ensuring no other AWS customer can access your cryptographic material. On the AWS Certified Cloud Practitioner CLF-C02 exam, this question tests your ability to distinguish between managed key services and dedicated hardware compliance—a common trap is picking KMS for its simplicity, but remember that “dedicated HSM” always points to CloudHSM. For a quick memory tip, think “Dedicated = CloudHSM, Shared = KMS,” and associate the “H” in HSM with “Hardware you hold.”
CLF-C02 Security and Compliance Practice Question
This CLF-C02 practice question tests your understanding of security and compliance. Match the stated requirement to the specific cloud service, access model, or configuration option — many options are valid in isolation but not for this scenario. After answering, compare your reasoning against the explanation and wrong-answer breakdown below. Once you have made your selection, read the full explanation to reinforce the concept and understand why each distractor is designed to mislead on exam day.
A financial services company must comply with PCI DSS requirements that mandate the use of a dedicated hardware security module (HSM) to store encryption keys used to protect cardholder data. The company plans to use server-side encryption in Amazon S3 and needs to ensure that the encryption keys are stored in a dedicated HSM under the company's sole control. Which AWS service should the company use to meet this requirement?
Answer choices
Why each option matters
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
AWS CloudHSM
AWS CloudHSM provides dedicated hardware security modules (HSMs) that are under the customer's sole control, meeting PCI DSS requirements for storing encryption keys in a dedicated HSM. It allows you to generate and manage your own encryption keys within a single-tenant, FIPS 140-2 Level 3 validated device, ensuring compliance with the mandate for dedicated hardware.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
AWS KMS with automatic key rotation
Why it's wrong here
AWS KMS uses shared, multi-tenant HSMs managed by AWS, not a dedicated HSM under the customer's sole control. Automatic key rotation does not address the requirement for a dedicated HSM.
- ✗
AWS Certificate Manager (ACM)
Why it's wrong here
ACM is used for provisioning, managing, and deploying SSL/TLS certificates for use with AWS services. It does not provide dedicated HSM storage for encryption keys used in S3 server-side encryption.
- ✓
AWS CloudHSM
Why this is correct
CloudHSM provides a dedicated HSM appliance that runs in the customer's VPC. The customer has exclusive control over the HSM and the keys it contains, meeting the PCI DSS requirement for a dedicated HSM under sole control.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
AWS Secrets Manager
Why it's wrong here
Secrets Manager is designed for securely storing and managing secrets such as database credentials and API keys. It does not provide dedicated HSM hardware for encryption key storage used with S3.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse AWS KMS with a dedicated HSM solution, but KMS is a shared, multi-tenant service that does not provide the sole control required by PCI DSS for dedicated HSMs.
Detailed technical explanation
How to think about this question
AWS CloudHSM provides a dedicated HSM appliance per customer, accessible via industry-standard APIs such as PKCS#11, Java JCE, and Microsoft CNG. Under the hood, each HSM is a single-tenant device with its own key hierarchy, and keys never leave the HSM boundary; this ensures that the customer retains exclusive control over key material, which is critical for PCI DSS compliance. In a real-world scenario, a financial services company would use CloudHSM to generate and store the Customer Master Key (CMK) used for S3 server-side encryption, ensuring that AWS cannot access the key material.
KKey Concepts to Remember
- Read the scenario before looking for a memorised answer.
- Find the constraint that changes the correct option.
- Eliminate answers that are true in general but not in this case.
TExam Day Tips
- Watch for words such as best, first, most likely and least administrative effort.
- Review why wrong options are wrong, not only why the correct option is correct.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
How this comes up in practice
A media company stores terabytes of video archives that are accessed once a year for audit purposes. Moving these objects to a cold storage tier (Azure Archive, S3 Glacier, or Google Nearline) costs a fraction of hot storage. Questions like this test whether you understand storage tiers, access frequency tradeoffs, and retrieval latency requirements.
What to study next
Got this wrong? Here's your next step.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
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Security and Compliance — study guide chapter
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FAQ
Questions learners often ask
What does this CLF-C02 question test?
Security and Compliance — This question tests Security and Compliance — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: AWS CloudHSM — AWS CloudHSM provides dedicated hardware security modules (HSMs) that are under the customer's sole control, meeting PCI DSS requirements for storing encryption keys in a dedicated HSM. It allows you to generate and manage your own encryption keys within a single-tenant, FIPS 140-2 Level 3 validated device, ensuring compliance with the mandate for dedicated hardware.
What should I do if I get this CLF-C02 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
Last reviewed: Jun 11, 2026
This CLF-C02 practice question is part of Courseiva's free Amazon Web Services certification practice question bank. Courseiva provides original exam-style practice questions with explanations, topic-based practice, mock exams, readiness tracking, and study analytics to help learners prepare for the CLF-C02 exam.
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