The answer is to create a user-assigned managed identity and attach it to the VM template. This is correct because a user-assigned managed identity is decoupled from the VM lifecycle, meaning its Azure AD object ID and RBAC role assignments persist independently of VM redeployments. Unlike a system-assigned managed identity, which is tied to the VM and destroyed when the VM is deleted, a user-assigned identity remains stable across redeployments, so the application retains its permissions without needing to reapply RBAC. On the AZ-104 exam, this scenario tests your understanding of managed identity types and their lifecycle dependencies—a common trap is assuming a system-assigned identity will survive a VM rebuild. Remember the memory tip: “User-assigned is reusable; system-assigned is disposable.” This distinction is critical when designing for identity stability in Azure automation or scaling scenarios.
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.
Exhibit
Bicep snippet:
resource vm 'Microsoft.Compute/virtualMachines@2023-09-01' = {
name: 'appvm01'
location: resourceGroup().location
identity: {
type: 'SystemAssigned'
}
properties: {
hardwareProfile: {
vmSize: 'Standard_D2s_v5'
}
osProfile: {
computerName: 'appvm01'
}
}
}
Operational note:
- The VM is rebuilt every month from source control.
- The workload must read secrets from Key Vault and upload logs to Blob Storage.
- Recreating the VM must not require new role assignments for the workload identity.
Based on the exhibit, which change should the administrator make so the application identity remains stable across VM redeployments without reapplying RBAC assignments?
Bicep snippet:
resource vm 'Microsoft.Compute/virtualMachines@2023-09-01' = {
name: 'appvm01'
location: resourceGroup().location
identity: {
type: 'SystemAssigned'
}
properties: {
hardwareProfile: {
vmSize: 'Standard_D2s_v5'
}
osProfile: {
computerName: 'appvm01'
}
}
}
Operational note:
- The VM is rebuilt every month from source control.
- The workload must read secrets from Key Vault and upload logs to Blob Storage.
- Recreating the VM must not require new role assignments for the workload identity.
A
Keep the system-assigned identity and reapply the same RBAC roles after each rebuild.
Why wrong: A system-assigned identity is recreated with the VM, so its object ID changes after redeployment. That forces RBAC updates every time.
B
Create a user-assigned managed identity and attach it to the VM template.
A user-assigned managed identity is an independent Azure resource. It survives VM deletion and redeployment, so RBAC assignments remain valid.
C
Store a local administrator password in Key Vault and use it for Azure resource access.
Why wrong: A local administrator password helps sign in to the VM, but it does not provide Azure authorization for Key Vault or Storage access.
D
Replace the identity with a shared access signature so the VM can authenticate to Azure services.
Why wrong: A SAS token is scoped to a storage resource and is not a general-purpose identity for Azure resource authorization or RBAC.
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Create a user-assigned managed identity and attach it to the VM template.
A user-assigned managed identity is decoupled from the VM lifecycle, so it persists independently of VM redeployments. By attaching the same user-assigned identity to the new VM instance, the application retains its Azure AD object ID and all existing RBAC role assignments remain valid without requiring reapplication.
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.
✗
Keep the system-assigned identity and reapply the same RBAC roles after each rebuild.
Why it's wrong here
A system-assigned identity is recreated with the VM, so its object ID changes after redeployment. That forces RBAC updates every time.
✓
Create a user-assigned managed identity and attach it to the VM template.
Why this is correct
A user-assigned managed identity is an independent Azure resource. It survives VM deletion and redeployment, so RBAC assignments remain valid.
Related concept
Read the scenario before looking for a memorised answer.
✗
Store a local administrator password in Key Vault and use it for Azure resource access.
Why it's wrong here
A local administrator password helps sign in to the VM, but it does not provide Azure authorization for Key Vault or Storage access.
✗
Replace the identity with a shared access signature so the VM can authenticate to Azure services.
Why it's wrong here
A SAS token is scoped to a storage resource and is not a general-purpose identity for Azure resource authorization or RBAC.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse system-assigned and user-assigned managed identities, assuming both persist across VM redeployments, but only user-assigned identities survive VM deletion because they are separate Azure resources.
Detailed technical explanation
How to think about this question
User-assigned managed identities are created as standalone Azure resources in Azure AD, with their own service principal and object ID. When attached to a VM, the Azure Instance Metadata Service (IMDS) endpoint provides tokens for that identity, and because the identity resource exists independently, it can be attached to a new VM after redeployment, preserving all pre-configured RBAC assignments. This decoupling is critical in scenarios like Azure Virtual Machine Scale Sets or autoscaling where instances are frequently replaced.
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: Create a user-assigned managed identity and attach it to the VM template. — A user-assigned managed identity is decoupled from the VM lifecycle, so it persists independently of VM redeployments. By attaching the same user-assigned identity to the new VM instance, the application retains its Azure AD object ID and all existing RBAC role assignments remain valid without requiring reapplication.
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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