- A
Three separate policy assignments at each subscription scope.
Why wrong: Separate assignments increase management overhead and make consolidated reporting harder to maintain consistently.
- B
One initiative assignment at the management group scope.
An initiative groups multiple related policies into one assignable unit. Assigning it at the management group scope ensures the controls apply to all current and future subscriptions beneath it, while keeping compliance reporting centralized and easier to manage.
- C
A resource lock on the management group to prevent noncompliant deployments.
Why wrong: Resource locks are not governance policies and cannot enforce allowed locations, required tags, or SKU rules.
- D
A custom RBAC role assigned to the management group.
Why wrong: RBAC controls what users can do, but it does not validate whether resource configurations meet compliance requirements.
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 company wants to enforce three controls across all current and future subscriptions under a management group: allowed Azure regions, a required cost center tag, and approved VM SKUs. Central IT wants a single assignment and consolidated compliance reporting. What should they use?
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
One initiative assignment at the management group scope.
An initiative (policy set) at the management group scope allows you to bundle multiple policy definitions (allowed regions, required tag, approved VM SKUs) into a single assignment. This ensures the controls apply to all current and future subscriptions under that management group, and Azure Policy provides consolidated compliance reporting at the management group level, meeting the requirement for a single assignment and unified view.
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.
- ✗
Three separate policy assignments at each subscription scope.
Why it's wrong here
Separate assignments increase management overhead and make consolidated reporting harder to maintain consistently.
- ✓
One initiative assignment at the management group scope.
Why this is correct
An initiative groups multiple related policies into one assignable unit. Assigning it at the management group scope ensures the controls apply to all current and future subscriptions beneath it, while keeping compliance reporting centralized and easier to manage.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
A resource lock on the management group to prevent noncompliant deployments.
Why it's wrong here
Resource locks are not governance policies and cannot enforce allowed locations, required tags, or SKU rules.
- ✗
A custom RBAC role assigned to the management group.
Why it's wrong here
RBAC controls what users can do, but it does not validate whether resource configurations meet compliance requirements.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse resource locks or RBAC with policy-based governance, thinking they can enforce allowed configurations through access control or locks, but only Azure Policy (via initiatives) can evaluate and enforce resource properties like regions, tags, and SKUs.
Detailed technical explanation
How to think about this question
Azure Policy initiatives (also called policy sets) are evaluated at assignment scope, and when assigned to a management group, the policies are inherited by all child subscriptions and resource groups. The compliance state is aggregated at the management group level in the Azure portal, allowing central IT to view non-compliant resources across the entire hierarchy without per-subscription navigation. This inheritance is evaluated at runtime during resource creation or update, and existing resources are also scanned for compliance via periodic evaluation.
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.
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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: One initiative assignment at the management group scope. — An initiative (policy set) at the management group scope allows you to bundle multiple policy definitions (allowed regions, required tag, approved VM SKUs) into a single assignment. This ensures the controls apply to all current and future subscriptions under that management group, and Azure Policy provides consolidated compliance reporting at the management group level, meeting the requirement for a single assignment and unified view.
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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