- A
Create a user-assigned managed identity.
Correct. A user-assigned managed identity is independent of any one VM and can outlive rebuilds.
- B
Assign that user-assigned identity to each VM that runs the script.
Correct. The same identity can be attached to multiple VMs, so the script keeps a stable identity.
- C
Use a system-assigned managed identity on one VM and clone it.
Why wrong: Incorrect. System-assigned identities are tied to one VM lifecycle and are not reusable across rebuilds.
- D
Store a service principal secret in the script configuration.
Why wrong: Incorrect. Storing secrets on disk violates the requirement and creates a credential management burden.
- E
Use a shared access signature to authenticate to Azure Resource Manager.
Why wrong: Incorrect. SAS is for storage access scenarios, not for authenticating to Azure management APIs.
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 scheduled script runs on several Azure VMs. The VMs are rebuilt often, and the script must always use the same Azure identity across every rebuild without storing secrets on disk. Which two steps should the administrator take? Select two.
Clue words in this question
Noticing these words before you look at the options changes how you read each choice.
Clue:
"always"Why it matters: Absolute qualifier. An answer using 'always' is only correct if there are genuinely no exceptions — absolute statements are often wrong in networking.
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 a user-assigned managed identity.
A user-assigned managed identity is the correct choice because it is an Azure identity that exists independently of any VM and can be assigned to multiple VMs. When a VM is rebuilt, you simply assign the same user-assigned identity to the new VM, and the script can authenticate using the identity's client ID without storing any secrets on disk. This ensures the script always uses the same identity across rebuilds, as the identity's credentials are managed entirely by Azure and rotated automatically.
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 a user-assigned managed identity.
Why this is correct
Correct. A user-assigned managed identity is independent of any one VM and can outlive rebuilds.
Clue confirmation
The clue word "always" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
- ✓
Assign that user-assigned identity to each VM that runs the script.
Why this is correct
Correct. The same identity can be attached to multiple VMs, so the script keeps a stable identity.
Clue confirmation
The clue word "always" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Use a system-assigned managed identity on one VM and clone it.
Why it's wrong here
Incorrect. System-assigned identities are tied to one VM lifecycle and are not reusable across rebuilds.
- ✗
Store a service principal secret in the script configuration.
Why it's wrong here
Incorrect. Storing secrets on disk violates the requirement and creates a credential management burden.
- ✗
Use a shared access signature to authenticate to Azure Resource Manager.
Why it's wrong here
Incorrect. SAS is for storage access scenarios, not for authenticating to Azure management APIs.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse system-assigned managed identities with user-assigned ones, mistakenly thinking a system-assigned identity can be reused across VM rebuilds, when in fact it is deleted when the VM is deleted and cannot be transferred.
Trap categories for this question
Scenario analysis trap
Incorrect. SAS is for storage access scenarios, not for authenticating to Azure management APIs.
Detailed technical explanation
How to think about this question
User-assigned managed identities leverage Azure's Managed Service Identity (MSI) infrastructure, where Azure automatically creates a service principal in Azure AD and rotates its certificate credentials every 45 days. The identity is assigned to a VM via the Azure Resource Manager, and the Azure Instance Metadata Service (IMDS) endpoint (169.254.169.254) provides an access token to the VM's guest OS without any secrets stored locally. In a real-world scenario, this is ideal for CI/CD pipelines or scheduled scripts that run on ephemeral VMs in a scale set, ensuring consistent access to Azure Key Vault or storage accounts across rebuilds.
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.
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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 a user-assigned managed identity. — A user-assigned managed identity is the correct choice because it is an Azure identity that exists independently of any VM and can be assigned to multiple VMs. When a VM is rebuilt, you simply assign the same user-assigned identity to the new VM, and the script can authenticate using the identity's client ID without storing any secrets on disk. This ensures the script always uses the same identity across rebuilds, as the identity's credentials are managed entirely by Azure and rotated automatically.
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.
Are there clue words in this question I should notice?
Yes — watch for: "always". Absolute qualifier. An answer using 'always' is only correct if there are genuinely no exceptions — absolute statements are often wrong in networking.
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
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