- A
A storage account access key
Why wrong: An access key works, but it is a shared secret that must be stored and protected somewhere.
- B
A system-assigned managed identity
A system-assigned managed identity is tied to the VM and lets the application authenticate to Azure services without storing credentials. Azure can issue tokens for the identity automatically, and the identity is removed when the VM is deleted. This is the simplest credential-free option for a single VM that needs access to Storage or other Azure resources.
- C
A shared access signature (SAS) token
Why wrong: A SAS token can limit access, but it is still a secret that must be issued, stored, and eventually rotated.
- D
A local administrator account on the VM
Why wrong: A local admin account controls access to the operating system, not Azure Storage authorization.
AZ-104 Manage Azure Identities and Governance Practice Question
This AZ-104 practice question tests your understanding of manage azure identities and governance. This is a configuration task: choose the command set that satisfies every stated requirement. Small differences — like 'secret' vs 'password' or 'transport input ssh' vs 'all' — change whether the answer is correct. 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 VM-hosted application must read blobs from an Azure Storage account without storing any secret in code or configuration. Which identity should you enable on the VM?
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
A system-assigned managed identity
A system-assigned managed identity (B) is the correct choice because it allows the VM to authenticate to Azure Storage without storing any credentials in code or configuration. Azure automatically manages the identity's lifecycle and provides a token that the VM can use to access the storage account via Azure AD authentication, eliminating the need for secrets.
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.
- ✗
A storage account access key
Why it's wrong here
An access key works, but it is a shared secret that must be stored and protected somewhere.
- ✓
A system-assigned managed identity
Why this is correct
A system-assigned managed identity is tied to the VM and lets the application authenticate to Azure services without storing credentials. Azure can issue tokens for the identity automatically, and the identity is removed when the VM is deleted. This is the simplest credential-free option for a single VM that needs access to Storage or other Azure resources.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
A shared access signature (SAS) token
Why it's wrong here
A SAS token can limit access, but it is still a secret that must be issued, stored, and eventually rotated.
- ✗
A local administrator account on the VM
Why it's wrong here
A local admin account controls access to the operating system, not Azure Storage authorization.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates may confuse managed identities with SAS tokens or access keys, thinking they need a shared secret for authentication, but Azure AD authentication with managed identities eliminates the need for any stored credentials.
Detailed technical explanation
How to think about this question
Under the hood, the system-assigned managed identity uses the Azure Instance Metadata Service (IMDS) to obtain an OAuth 2.0 access token for Azure AD. The VM's code can request a token from the local IMDS endpoint (169.254.169.254) using the managed identity's client ID, then use that token to authenticate to Azure Storage via Bearer authorization. This approach also supports role-based access control (RBAC) by assigning the 'Storage Blob Data Reader' role to the managed identity at the storage account or container scope.
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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Manage Azure Identities and Governance — study guide chapter
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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: A system-assigned managed identity — A system-assigned managed identity (B) is the correct choice because it allows the VM to authenticate to Azure Storage without storing any credentials in code or configuration. Azure automatically manages the identity's lifecycle and provides a token that the VM can use to access the storage account via Azure AD authentication, eliminating the need for secrets.
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
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 →
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Last reviewed: Jun 11, 2026
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