- A
A system-assigned managed identity
A system-assigned managed identity is created for one Azure resource, such as a VM, and its lifecycle is tied to that resource. The app can use Azure AD-based authentication to access Blob Storage without storing secrets on the VM. If the VM is deleted, the identity is also removed, which matches the requirement exactly. This is the preferred approach for credential-free access when only one VM needs the identity.
- B
A shared storage account key in the application settings
Why wrong: A storage account key is a secret that must be stored and managed, which violates the no-secrets requirement.
- C
A user account with a local password on the VM
Why wrong: A local account helps with sign-in to the operating system, but it does not provide secure Azure Storage authorization.
- D
A service endpoint on the VM subnet
Why wrong: A service endpoint changes network access behavior, but it does not replace authentication or remove the need for credentials.
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 web app running on an Azure VM must read files from Azure Blob Storage without storing any passwords, secrets, or access keys on the VM. The identity should be tied to that VM and removed automatically if the VM is deleted. What should you enable?
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 is the correct choice because it creates an identity in Azure AD that is tied directly to the lifecycle of the VM. When the VM is deleted, the identity is automatically removed. The VM can use this identity to authenticate to Azure Blob Storage via Azure AD without storing any credentials on the VM, using the Azure Instance Metadata Service (IMDS) to obtain tokens.
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 system-assigned managed identity
Why this is correct
A system-assigned managed identity is created for one Azure resource, such as a VM, and its lifecycle is tied to that resource. The app can use Azure AD-based authentication to access Blob Storage without storing secrets on the VM. If the VM is deleted, the identity is also removed, which matches the requirement exactly. This is the preferred approach for credential-free access when only one VM needs the identity.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
A shared storage account key in the application settings
Why it's wrong here
A storage account key is a secret that must be stored and managed, which violates the no-secrets requirement.
- ✗
A user account with a local password on the VM
Why it's wrong here
A local account helps with sign-in to the operating system, but it does not provide secure Azure Storage authorization.
- ✗
A service endpoint on the VM subnet
Why it's wrong here
A service endpoint changes network access behavior, but it does not replace authentication or remove the need for credentials.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse service endpoints (which only provide network-level access control) with managed identities (which provide identity-based authentication), leading them to select option D thinking it enables secure access without credentials.
Detailed technical explanation
How to think about this question
Under the hood, a system-assigned managed identity uses the Azure Instance Metadata Service (IMDS) endpoint (169.254.169.254) to obtain an access token for Azure AD. The token is then used in the Authorization header of requests to Blob Storage (e.g., via the Azure SDK or REST API). This identity is automatically created and deleted with the VM, and its principal ID is stored in Azure AD. A real-world scenario is a batch processing VM that reads input files from a storage container; using a system-assigned managed identity eliminates the need to rotate keys or manage secrets.
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.
- →
Manage Azure Identities and Governance — study guide chapter
Learn the concepts, then practise the questions
- →
Manage Azure Identities and Governance practice questions
Targeted practice on this topic area only
- →
All AZ-104 questions
1,170 questions across all exam domains
- →
AZ-104 study guide
Full concept coverage aligned to exam objectives
- →
AZ-104 practice test guide
How to use practice tests most effectively before exam day
Related practice questions
Related AZ-104 practice-question pages
Use these pages to review the topic behind this question. This is how one missed question becomes focused revision.
Manage Azure Identities and Governance practice questions
Practise AZ-104 questions linked to Manage Azure Identities and Governance.
Implement and Manage Storage practice questions
Practise AZ-104 questions linked to Implement and Manage Storage.
Deploy and Manage Azure Compute practice questions
Practise AZ-104 questions linked to Deploy and Manage Azure Compute.
Implement and Manage Virtual Networking practice questions
Practise AZ-104 questions linked to Implement and Manage Virtual Networking.
Monitor and Maintain Azure Resources practice questions
Practise AZ-104 questions linked to Monitor and Maintain Azure Resources.
AZ-104 Azure RBAC practice questions
Practise AZ-104 questions linked to AZ-104 Azure RBAC.
AZ-104 storage account practice questions
Practise AZ-104 questions linked to AZ-104 storage account.
AZ-104 virtual network practice questions
Practise AZ-104 questions linked to AZ-104 virtual network.
AZ-104 NSG practice questions
Practise AZ-104 questions linked to AZ-104 NSG.
AZ-104 Azure Monitor practice questions
Practise AZ-104 questions linked to AZ-104 Azure Monitor.
AZ-104 backup practice questions
Practise AZ-104 questions linked to AZ-104 backup.
AZ-104 managed identity practice questions
Practise AZ-104 questions linked to AZ-104 managed identity.
Practice this exam
Start a free AZ-104 practice session
Short sessions build daily habit. Longer sessions build exam-day stamina. Try a timed session to simulate real conditions.
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 is the correct choice because it creates an identity in Azure AD that is tied directly to the lifecycle of the VM. When the VM is deleted, the identity is automatically removed. The VM can use this identity to authenticate to Azure Blob Storage via Azure AD without storing any credentials on the VM, using the Azure Instance Metadata Service (IMDS) to obtain tokens.
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 →
Keep practising
More AZ-104 practice questions
- A storage automation service principal must upload, read, and delete blob data in one container by using Microsoft Entra…
- A subnet contains several application servers. You need to allow inbound TCP 3389 only from a management subnet named Su…
- A subscription admin wants to investigate who changed a resource and also review the platform-generated events for that…
- Based on the exhibit, which Azure feature should the administrator use to track this kind of platform-wide service issue…
- An administrator wants a script running on an Azure VM to create a resource in Azure without storing any passwords or cl…
- A PowerShell script runs on an Azure VM every night and uses Azure CLI commands to create tags and VM resources in anoth…
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.
Question Discussion
Share a tip, memory trick, or ask about the reasoning behind this question. Do not post real exam questions, leaked content, braindumps, or copyrighted exam material. Comments are moderated and may be removed without notice.
Sign in to join the discussion.