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.
Exhibit
Automation notes
VMs: vm-a1, vm-a2, vm-a3
Script requirement:
- Authenticate to Azure Resource Manager
- No password or certificate stored on disk
- Same identity must be used by all three VMs
- Identity must survive VM rebuilds and replacements
Based on the exhibit, three Azure virtual machines run the same automation script. The VMs are rebuilt often, and the team wants one identity that can be reused across all three VMs and retained even if a VM is replaced. Which identity type should the administrator use?
Automation notes
VMs: vm-a1, vm-a2, vm-a3
Script requirement:
- Authenticate to Azure Resource Manager
- No password or certificate stored on disk
- Same identity must be used by all three VMs
- Identity must survive VM rebuilds and replacements
A
System-assigned managed identity on each VM, because each VM gets the same identity automatically.
Why wrong: System-assigned identities are unique to each resource and are deleted with that resource. They cannot be shared across multiple VMs and would not survive rebuilds or replacements in the way described.
B
A user-assigned managed identity attached to all three VMs.
A user-assigned managed identity is independent of any single VM and can be attached to multiple resources. That makes it ideal when several VMs need the same identity and the identity must survive if a VM is deleted, rebuilt, or replaced during maintenance or scaling.
C
An Azure AD guest user account, because the same account can sign in from every VM.
Why wrong: A guest user account is a human identity and is not the proper pattern for noninteractive automation. It would also introduce password management and lifecycle concerns that the scenario explicitly wants to avoid.
D
A shared storage account key, because it can be used by multiple VMs without extra configuration.
Why wrong: A storage account key is unrelated to Azure Resource Manager authentication and does not meet the requirement for a reusable Azure identity. It would also weaken security because it is a long-lived secret that the team wants to avoid storing on disk.
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
A user-assigned managed identity attached to all three VMs.
A user-assigned managed identity is the correct choice because it is created as a standalone Azure resource and can be assigned to multiple VMs. Unlike system-assigned identities, which are tied to the lifecycle of a single VM, a user-assigned identity persists independently and remains available even when VMs are rebuilt or replaced. This allows the automation script to use the same identity across all three VMs without needing to reconfigure permissions after each rebuild.
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.
✗
System-assigned managed identity on each VM, because each VM gets the same identity automatically.
Why it's wrong here
System-assigned identities are unique to each resource and are deleted with that resource. They cannot be shared across multiple VMs and would not survive rebuilds or replacements in the way described.
✓
A user-assigned managed identity attached to all three VMs.
Why this is correct
A user-assigned managed identity is independent of any single VM and can be attached to multiple resources. That makes it ideal when several VMs need the same identity and the identity must survive if a VM is deleted, rebuilt, or replaced during maintenance or scaling.
Related concept
Read the scenario before looking for a memorised answer.
✗
An Azure AD guest user account, because the same account can sign in from every VM.
Why it's wrong here
A guest user account is a human identity and is not the proper pattern for noninteractive automation. It would also introduce password management and lifecycle concerns that the scenario explicitly wants to avoid.
✗
A shared storage account key, because it can be used by multiple VMs without extra configuration.
Why it's wrong here
A storage account key is unrelated to Azure Resource Manager authentication and does not meet the requirement for a reusable Azure identity. It would also weaken security because it is a long-lived secret that the team wants to avoid storing on disk.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates confuse system-assigned and user-assigned managed identities, assuming that 'system-assigned' means the same identity is automatically shared across all VMs, when in fact each system-assigned identity is unique and tied to a single VM's lifecycle.
Trap categories for this question
Scenario analysis trap
A guest user account is a human identity and is not the proper pattern for noninteractive automation. It would also introduce password management and lifecycle concerns that the scenario explicitly wants to avoid.
Detailed technical explanation
How to think about this question
User-assigned managed identities are registered as service principals in Azure AD and can be assigned to up to 1,000 Azure resources. Under the hood, Azure automatically rotates the associated certificates (or uses Azure Instance Metadata Service (IMDS) endpoints) to obtain tokens for Azure AD authentication. This makes them ideal for scenarios where VMs are ephemeral but the identity and its role assignments (e.g., Contributor on a storage account) must persist across rebuilds.
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.
Related glossary terms
Concepts from this question explained
These glossary pages explain the core terms tested in this AZ-104 question in full detail.
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 user-assigned managed identity attached to all three VMs. — A user-assigned managed identity is the correct choice because it is created as a standalone Azure resource and can be assigned to multiple VMs. Unlike system-assigned identities, which are tied to the lifecycle of a single VM, a user-assigned identity persists independently and remains available even when VMs are rebuilt or replaced. This allows the automation script to use the same identity across all three VMs without needing to reconfigure permissions after each rebuild.
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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Question Discussion
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