- A
Create an Azure Policy initiative that contains both policy definitions.
An initiative groups multiple related policies into a single package, which makes it easier to manage the department's governance rules together.
- B
Assign the initiative at the management group scope.
Management group scope ensures the governance rules apply broadly across all current and future subscriptions that are placed under that hierarchy.
- C
Assign each policy only to one resource group.
Why wrong: A resource group assignment would be too narrow and would not cover all subscriptions in the department. It also fragments governance.
- D
Use Azure RBAC instead of Policy for both requirements.
Why wrong: RBAC controls access permissions, not compliance rules such as location restrictions or tag auditing. These are policy scenarios, not authorization scenarios.
- E
Create a read-only lock on each subscription.
Why wrong: A lock is not a substitute for policy. It does not audit tags or selectively deny disallowed regions; it mainly protects resources from change.
AZ-104 Manage Azure Identities and Governance Practice Question
This AZ-104 practice question tests your understanding of manage azure identities and governance. 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 department has 10 subscriptions and wants the same two governance rules applied to all current and future subscriptions. One rule audits missing tags, and the other denies unapproved locations. Which two actions should the administrator take? Select two.
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
Create an Azure Policy initiative that contains both policy definitions.
Azure Policy Initiative allows grouping multiple policy definitions (like audit for missing tags and deny for unapproved locations) into a single set for coordinated enforcement. Assigning the initiative at the management group scope ensures it applies to all current and future subscriptions under that management group, meeting the requirement for consistent governance across all 10 subscriptions and any new ones added later.
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.
- ✓
Create an Azure Policy initiative that contains both policy definitions.
Why this is correct
An initiative groups multiple related policies into a single package, which makes it easier to manage the department's governance rules together.
Related concept
Read the scenario before looking for a memorised answer.
- ✓
Assign the initiative at the management group scope.
Why this is correct
Management group scope ensures the governance rules apply broadly across all current and future subscriptions that are placed under that hierarchy.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Assign each policy only to one resource group.
Why it's wrong here
A resource group assignment would be too narrow and would not cover all subscriptions in the department. It also fragments governance.
- ✗
Use Azure RBAC instead of Policy for both requirements.
Why it's wrong here
RBAC controls access permissions, not compliance rules such as location restrictions or tag auditing. These are policy scenarios, not authorization scenarios.
- ✗
Create a read-only lock on each subscription.
Why it's wrong here
A lock is not a substitute for policy. It does not audit tags or selectively deny disallowed regions; it mainly protects resources from change.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse Azure Policy with Azure RBAC or resource locks, thinking they can enforce governance rules through permissions or protection mechanisms, when Policy is the only service that audits and denies resource configurations based on rules.
Trap categories for this question
Scenario analysis trap
RBAC controls access permissions, not compliance rules such as location restrictions or tag auditing. These are policy scenarios, not authorization scenarios.
Detailed technical explanation
How to think about this question
Azure Policy initiatives (also called policy sets) are evaluated at assignment scope using the Azure Policy engine, which checks resource compliance during create, update, and periodic evaluation cycles. When assigned at a management group, the initiative inherits to all child subscriptions and resource groups, and any new subscription added to that management group automatically receives the policy assignment. The deny effect for unapproved locations uses the 'policyRule' with 'then.effect' set to 'Deny', which blocks non-compliant resource creation at the Azure Resource Manager level before the resource is provisioned.
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 company's IT admin needs to give a contractor read-only access to production logs without sharing account credentials. Using role-based access control (RBAC) and temporary scoped permissions — not a permanent shared password — is the correct pattern. Questions like this test whether you can apply least-privilege access across cloud identity services.
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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FAQ
Questions learners often ask
What does this AZ-104 question test?
Manage Azure Identities and Governance — This question tests Manage Azure Identities and Governance — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Create an Azure Policy initiative that contains both policy definitions. — Azure Policy Initiative allows grouping multiple policy definitions (like audit for missing tags and deny for unapproved locations) into a single set for coordinated enforcement. Assigning the initiative at the management group scope ensures it applies to all current and future subscriptions under that management group, meeting the requirement for consistent governance across all 10 subscriptions and any new ones added later.
What should I do if I get this AZ-104 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
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Last reviewed: Jun 11, 2026
This AZ-104 practice question is part of Courseiva's free Microsoft 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 AZ-104 exam.
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