- A
Use a user-assigned managed identity so the identity is independent of the Automation account lifecycle.
A user-assigned managed identity is not tied to one specific Automation account instance. That makes it resilient when the account is recreated during migration or recovery activities. It also avoids storing passwords or secrets in the runbook, which satisfies the secure automation requirement.
- B
Grant the managed identity the required Azure RBAC roles on the target resources or resource groups.
An identity without permissions still cannot perform the work, so role assignment is required. Granting only the needed RBAC roles keeps the solution secure and operational. This is the proper way to authorize a secretless automation identity in Azure.
- C
Use a service principal with a client secret stored in an encrypted Automation variable.
Why wrong: Although this can work technically, it still stores a long-lived secret that must be protected and rotated. The requirement explicitly says to avoid embedded credentials, so this approach does not meet the security goal.
- D
Use a system-assigned managed identity attached to the Automation account because it is always reusable after recreation.
Why wrong: A system-assigned managed identity is lifecycle-bound to the resource that owns it. If the Automation account is rebuilt, the identity changes as well, which breaks the requirement for continuity across recreation. That makes this option unsuitable here.
- E
Store a storage account key in a runbook asset and retrieve it at runtime.
Why wrong: A storage account key is a secret and behaves like a password. Storing it in a runbook asset still leaves you managing credentials, rotation, and exposure risk. This directly conflicts with the requirement to avoid embedded secrets.
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.
An Azure Automation account is recreated periodically during a migration project. Runbooks must authenticate to Azure resources without embedded secrets, and the identity must continue to work after the account is rebuilt. Which two choices should you make? 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
Use a user-assigned managed identity so the identity is independent of the Automation account lifecycle.
Option A is correct because a user-assigned managed identity exists as a standalone Azure resource independent of the Automation account's lifecycle. When the Automation account is recreated, you can reassign the same user-assigned managed identity to the new account, preserving the identity's object ID and its RBAC role assignments. This ensures that runbooks can authenticate without embedded secrets and continue to work seamlessly after the account is rebuilt.
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.
- ✓
Use a user-assigned managed identity so the identity is independent of the Automation account lifecycle.
Why this is correct
A user-assigned managed identity is not tied to one specific Automation account instance. That makes it resilient when the account is recreated during migration or recovery activities. It also avoids storing passwords or secrets in the runbook, which satisfies the secure automation requirement.
Related concept
Read the scenario before looking for a memorised answer.
- ✓
Grant the managed identity the required Azure RBAC roles on the target resources or resource groups.
Why this is correct
An identity without permissions still cannot perform the work, so role assignment is required. Granting only the needed RBAC roles keeps the solution secure and operational. This is the proper way to authorize a secretless automation identity in Azure.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Use a service principal with a client secret stored in an encrypted Automation variable.
Why it's wrong here
Although this can work technically, it still stores a long-lived secret that must be protected and rotated. The requirement explicitly says to avoid embedded credentials, so this approach does not meet the security goal.
- ✗
Use a system-assigned managed identity attached to the Automation account because it is always reusable after recreation.
Why it's wrong here
A system-assigned managed identity is lifecycle-bound to the resource that owns it. If the Automation account is rebuilt, the identity changes as well, which breaks the requirement for continuity across recreation. That makes this option unsuitable here.
- ✗
Store a storage account key in a runbook asset and retrieve it at runtime.
Why it's wrong here
A storage account key is a secret and behaves like a password. Storing it in a runbook asset still leaves you managing credentials, rotation, and exposure risk. This directly conflicts with the requirement to avoid embedded secrets.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often assume a system-assigned managed identity is reusable after account recreation, but they fail to recognize that its object ID changes upon deletion and recreation, breaking existing RBAC assignments.
Detailed technical explanation
How to think about this question
User-assigned managed identities are backed by a service principal in Azure AD with a stable object ID, allowing RBAC role assignments to persist even if the Automation account is deleted and recreated. Under the hood, the Automation account references the user-assigned identity via its resource ID, and the Azure Instance Metadata Service (IMDS) endpoint provides tokens for that identity at runtime. In a real-world migration scenario, this design avoids the need to update role assignments or rotate secrets each time the Automation account is rebuilt, reducing operational overhead and security risks.
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.
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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: Use a user-assigned managed identity so the identity is independent of the Automation account lifecycle. — Option A is correct because a user-assigned managed identity exists as a standalone Azure resource independent of the Automation account's lifecycle. When the Automation account is recreated, you can reassign the same user-assigned managed identity to the new account, preserving the identity's object ID and its RBAC role assignments. This ensures that runbooks can authenticate without embedded secrets and continue to work seamlessly after the account is rebuilt.
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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