- A
Create a security group in Microsoft Entra ID for the contractor pool.
A security group is the right identity container for changing membership. Contractors can be added or removed from the group without touching the Azure RBAC assignment itself, which keeps access administration simple and consistent over time.
- B
Assign the Azure role directly to each contractor account.
Why wrong: Direct user assignments work, but they create maintenance overhead whenever contractors join or leave. That approach does not satisfy the goal of avoiding frequent role assignment changes for individual people.
- C
Create a Microsoft 365 group and use it for VM sign-in.
Why wrong: Microsoft 365 groups are not the standard choice for Azure RBAC delegation tasks. They are oriented toward collaboration services, not least-privilege access administration for Azure resources.
- D
Assign the Azure role to the security group rather than to individual users.
Role assignment to the group is what makes membership changes automatic from an access-control perspective. As long as users are managed in the group, the RBAC assignment remains unchanged and reusable.
- E
Use a user-assigned managed identity for each contractor.
Why wrong: Managed identities are for Azure resources, not human contractors. They are attached to workloads, so they do not solve human access delegation or membership-based administration.
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 contractor pool changes every month. The operations team wants Azure role access to stay the same when people join or leave, without editing role assignments for each person. 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 a security group in Microsoft Entra ID for the contractor pool.
Option A is correct because creating a security group in Microsoft Entra ID (formerly Azure AD) allows the administrator to manage membership dynamically or manually as contractors join or leave. By assigning the Azure role to this security group (Option D), role assignments remain constant; only group membership changes, eliminating the need to edit individual role assignments. This approach leverages Azure RBAC's support for security groups as assignable principals, ensuring consistent access control.
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 security group in Microsoft Entra ID for the contractor pool.
Why this is correct
A security group is the right identity container for changing membership. Contractors can be added or removed from the group without touching the Azure RBAC assignment itself, which keeps access administration simple and consistent over time.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Assign the Azure role directly to each contractor account.
Why it's wrong here
Direct user assignments work, but they create maintenance overhead whenever contractors join or leave. That approach does not satisfy the goal of avoiding frequent role assignment changes for individual people.
When this WOULD be correct
This option would be correct in a scenario where the contractor pool is static (no turnover) and the administrator needs to grant specific, individual permissions that differ per contractor, with no requirement for automated group-based management.
- ✗
Create a Microsoft 365 group and use it for VM sign-in.
Why it's wrong here
Microsoft 365 groups are not the standard choice for Azure RBAC delegation tasks. They are oriented toward collaboration services, not least-privilege access administration for Azure resources.
When this WOULD be correct
This option would be correct in a question about enabling VM sign-in for a group of users using Microsoft Entra ID authentication, where a Microsoft 365 group can be used to grant access to VMs joined to Microsoft Entra ID.
- ✓
Assign the Azure role to the security group rather than to individual users.
Why this is correct
Role assignment to the group is what makes membership changes automatic from an access-control perspective. As long as users are managed in the group, the RBAC assignment remains unchanged and reusable.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Use a user-assigned managed identity for each contractor.
Why it's wrong here
Managed identities are for Azure resources, not human contractors. They are attached to workloads, so they do not solve human access delegation or membership-based administration.
When this WOULD be correct
A question asks how to grant an Azure VM access to Key Vault secrets without storing credentials. The correct answer would be to assign a user-assigned managed identity to the VM and grant that identity the Key Vault Secrets User role.
Option-by-option analysis
Why each answer is right or wrong
Understanding why wrong answers are wrong — and when they would be correct — is what separates a 750 score from a 900. The AZ-104 exam frequently reuses these exact scenarios with slightly different constraints.
✓Create a security group in Microsoft Entra ID for the contractor pool.Correct answer▾
Why this is correct
A security group is the right identity container for changing membership. Contractors can be added or removed from the group without touching the Azure RBAC assignment itself, which keeps access administration simple and consistent over time.
✗Assign the Azure role directly to each contractor account.Wrong answer — click to see why▾
Why this is wrong here
Assigning the Azure role directly to each contractor account requires manual updates when contractors join or leave, which contradicts the requirement to keep role access unchanged without editing assignments.
★ When this WOULD be the correct answer
This option would be correct in a scenario where the contractor pool is static (no turnover) and the administrator needs to grant specific, individual permissions that differ per contractor, with no requirement for automated group-based management.
Why candidates choose this
Candidates may think direct assignment is simpler or more straightforward, not realizing it creates administrative overhead for a dynamic group like a monthly-changing contractor pool.
✗Create a Microsoft 365 group and use it for VM sign-in.Wrong answer — click to see why▾
Why this is wrong here
Creating a Microsoft 365 group does not help manage Azure role assignments for a contractor pool; it is designed for collaboration features like shared mailboxes and calendars, not for assigning Azure roles to users.
★ When this WOULD be the correct answer
This option would be correct in a question about enabling VM sign-in for a group of users using Microsoft Entra ID authentication, where a Microsoft 365 group can be used to grant access to VMs joined to Microsoft Entra ID.
Why candidates choose this
Candidates may confuse Microsoft 365 groups with security groups, thinking both can be used for Azure role assignments, or they may focus on the 'VM sign-in' aspect without considering the core requirement of managing role access for a changing contractor pool.
✗Use a user-assigned managed identity for each contractor.Wrong answer — click to see why▾
Why this is wrong here
User-assigned managed identities are for Azure resources (e.g., VMs, apps) to authenticate to Azure services, not for assigning Azure RBAC roles to human users. They cannot replace role assignments for a changing contractor pool.
★ When this WOULD be the correct answer
A question asks how to grant an Azure VM access to Key Vault secrets without storing credentials. The correct answer would be to assign a user-assigned managed identity to the VM and grant that identity the Key Vault Secrets User role.
Why candidates choose this
Candidates may confuse managed identities with security groups, thinking they can dynamically manage user access, or they may overcomplicate the solution by introducing an identity concept that is not designed for user role assignments.
Analysis generated from the official AZ-104blueprint and verified against question context. The “when correct” sections are what AI assistants cite when candidates ask “what’s the difference between these options?”
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse Microsoft 365 groups (used for collaboration and Entra ID join) with security groups (used for RBAC assignments), leading them to select Option C instead of A.
Detailed technical explanation
How to think about this question
Under the hood, Azure RBAC evaluates role assignments at the scope (e.g., subscription, resource group) and checks the principal's group membership via Microsoft Entra ID. When a security group is assigned a role, Azure RBAC performs a transitive membership evaluation, meaning nested groups are also considered. In a real-world scenario, using dynamic group rules (e.g., based on department or location) can automate membership updates, ensuring contractors gain or lose access without manual intervention, while the role assignment remains unchanged.
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.
Quick reference
Access Control Model Comparison
| Model | Acronym | Who Controls Access? | Best For |
|---|---|---|---|
| Discretionary Access Control | DAC | Resource owner | Small teams, file shares |
| Mandatory Access Control | MAC | System / security labels | Classified govt / military |
| Role-Based Access Control | RBAC | Administrator (via roles) | Enterprise environments |
| Attribute-Based Access Control | ABAC | Policy engine (user + resource attributes) | Fine-grained, dynamic policies |
| Rule-Based Access Control | RuBAC | System rules / ACLs | Firewall rules, network ACLs |
What to study next
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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 security group in Microsoft Entra ID for the contractor pool. — Option A is correct because creating a security group in Microsoft Entra ID (formerly Azure AD) allows the administrator to manage membership dynamically or manually as contractors join or leave. By assigning the Azure role to this security group (Option D), role assignments remain constant; only group membership changes, eliminating the need to edit individual role assignments. This approach leverages Azure RBAC's support for security groups as assignable principals, ensuring consistent access control.
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.
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Last reviewed: Jun 11, 2026
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