Question 5 of 1,170

Manage Azure Identities and Governance →mediumMultiple SelectObjective-mapped

Quick Answer

The answer is to create a policy with the Modify effect and then run a remediation task for noncompliant existing resources. This is correct because the Modify effect automatically adds or updates the CostCenter tag during resource creation or update without blocking the deployment, unlike the Deny effect which would reject the request entirely. For existing resources that are already noncompliant, a remediation task is required to apply the tag retroactively, as the Modify effect only triggers on new or updated resources. On the AZ-104 exam, this scenario tests your understanding of policy effects and the distinction between preventing noncompliant resources (Deny) versus correcting them (Modify), a common trap where students mistakenly choose Deny. Remember the memory tip: “Modify to comply, remediate to apply”—the Modify effect handles new deployments automatically, while remediation fixes what’s already there.

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.

Finance wants every resource created in one production resource group to receive the tag CostCenter=FINSVC automatically, but deployments should not be blocked if a template omits the tag. Existing resources should be updated when possible. Which two actions should the administrator take? Select two.

Question 1mediummulti select

Full question →

A
Assign a Modify policy that adds or updates the CostCenter tag.
The Modify effect can automatically add or update tags without blocking the deployment. That matches the requirement to keep deployments flowing while enforcing the tag.
B
Run a remediation task for noncompliant existing resources.
Remediation updates already deployed resources so they can receive the tag as well. Without remediation, the policy would mostly affect new or changed resources.
C
Apply a ReadOnly lock to the resource group to keep tags consistent.
Why wrong: ReadOnly would block normal operational changes, including the tag updates you are trying to automate. It is not a tagging strategy.
D
Assign Reader to the resource group to ensure tag visibility.
Why wrong: Reader provides visibility but does not create or modify tags. It has no effect on compliance enforcement.
E
Use only an Audit policy so teams can see missing tags.
Why wrong: Audit reports noncompliance but does not correct it. The scenario specifically requires automatic tagging when possible.

Full breakdown with real-world context →

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

✓

Assign a Modify policy that adds or updates the CostCenter tag.

Option A is correct because a Modify effect policy definition can automatically add or update the CostCenter tag on resources during creation or update, without blocking deployments if the tag is missing. This satisfies the requirement that deployments should not be blocked, as the Modify effect only applies the tag rather than denying non-compliant requests.

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.

✓
Assign a Modify policy that adds or updates the CostCenter tag.
Why this is correct
The Modify effect can automatically add or update tags without blocking the deployment. That matches the requirement to keep deployments flowing while enforcing the tag.
Related concept
Read the scenario before looking for a memorised answer.
✓
Run a remediation task for noncompliant existing resources.
Why this is correct
Remediation updates already deployed resources so they can receive the tag as well. Without remediation, the policy would mostly affect new or changed resources.
Related concept
Read the scenario before looking for a memorised answer.
✗
Apply a ReadOnly lock to the resource group to keep tags consistent.
Why it's wrong here
ReadOnly would block normal operational changes, including the tag updates you are trying to automate. It is not a tagging strategy.
✗
Assign Reader to the resource group to ensure tag visibility.
Why it's wrong here
Reader provides visibility but does not create or modify tags. It has no effect on compliance enforcement.
✗
Use only an Audit policy so teams can see missing tags.
Why it's wrong here
Audit reports noncompliance but does not correct it. The scenario specifically requires automatic tagging when possible.

Common exam traps

Common exam trap: answer the scenario, not the keyword

The trap here is that candidates often confuse Audit and Modify effects, thinking Audit can automatically fix tags, or they mistakenly believe a ReadOnly lock is needed to enforce consistency, when in fact Modify with remediation is the correct approach for automatic tag application without blocking deployments.

Trap categories for this question

Scenario analysis trap
Audit reports noncompliance but does not correct it. The scenario specifically requires automatic tagging when possible.

Detailed technical explanation

How to think about this question

Azure Policy's Modify effect uses a 'deployIfNotExists' style remediation task to apply tags at resource creation or update, and it can also be triggered against existing resources via a remediation task. The policy definition includes a 'roleDefinitionIds' array specifying the managed identity role (e.g., Contributor) needed to modify resources, and the remediation task runs asynchronously to update non-compliant resources without blocking the original deployment.

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 startup's cloud architect reviews their monthly bill and notices costs are higher than expected for a long-running batch job. Switching from on-demand instances to Reserved Instances — or using Spot/Preemptible VMs — can reduce compute costs by up to 72 %. Questions like this test whether you understand the tradeoffs between commitment, flexibility, and cost across cloud pricing models.

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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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: Assign a Modify policy that adds or updates the CostCenter tag. — Option A is correct because a Modify effect policy definition can automatically add or update the CostCenter tag on resources during creation or update, without blocking deployments if the tag is missing. This satisfies the requirement that deployments should not be blocked, as the Modify effect only applies the tag rather than denying non-compliant requests.

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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Same concept, more angles

2 more ways this is tested on AZ-104

These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.

Variation 1. The finance team wants every resource created in one resource group to carry the same CostCenter tag automatically. They want to reduce manual entry and keep the tag value consistent. What should you configure?

easy

A.Ask users to add the tag manually to every resource
B.Assign a Reader role to the finance team
C.Apply a CanNotDelete lock to the resource group
✓ D.Use Azure Policy to inherit the CostCenter tag from the resource group

Why D: Option D is correct because Azure Policy can enforce tag inheritance from a resource group to all resources within it using the 'Inherit a tag from the resource group' built-in policy effect. This ensures the CostCenter tag is automatically applied to every new or existing resource without manual entry, maintaining consistency and reducing administrative overhead.

Variation 2. A finance team wants every resource created in one production resource group to carry CostCenter=PRD automatically. They do not want deployments blocked if a team forgets the tag, but they do want existing resources and future resources in that resource group to converge on the correct tag value. What should the administrator configure?

hard

A.Apply a CanNotDelete lock to the production resource group.
✓ B.Assign a modify policy for CostCenter=PRD at the production resource group scope and create a remediation task.
C.Assign Contributor on the subscription and require teams to enter the tag manually.
D.Set the tag on the management group and expect all resources to inherit it automatically.

Why B: Option B is correct because Azure Policy with a 'modify' effect can automatically add or correct the CostCenter tag on resources within the specified scope. By assigning the policy at the production resource group scope and creating a remediation task, the policy will audit existing resources and, via a managed identity, apply the tag value to non-compliant resources without blocking deployment. This satisfies the requirement for automatic convergence without preventing creation if the tag is missing.

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