- A
System-assigned managed identity, because it is tied to one VM and can request tokens without stored secrets.
A system-assigned managed identity is attached to one resource and avoids storing any secret in the application.
- B
User-assigned managed identity, because it can be reused by multiple resources without embedding credentials.
A user-assigned managed identity can be shared and still provides secretless authentication to storage.
- C
Storage account shared key, because it is the preferred credential when you want to avoid passwords.
Why wrong: A shared key is a secret credential, so it does not meet the no-secrets requirement.
- D
Basic authentication with a storage account name and password, because Azure Storage supports that model directly.
Why wrong: Azure Storage does not use basic username and password authentication for blob access.
- E
Anonymous public access, because it lets the VM read blobs without any authentication at all.
Why wrong: Anonymous access is only suitable for public content and is not a secure identity-based approach.
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 VM-hosted application must read blobs from Azure Storage without storing any keys or passwords. Which two identity types can the VM use to authenticate to Azure Storage? 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
System-assigned managed identity, because it is tied to one VM and can request tokens without stored secrets.
System-assigned managed identity is correct because it is directly tied to a single VM and can request tokens from Azure AD without storing any secrets or keys. The VM uses its managed identity to authenticate to Azure Storage by obtaining an OAuth 2.0 token, which is then passed to the storage service via the Authorization header. This eliminates the need for any stored credentials, meeting the requirement of not storing keys or passwords.
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, because it is tied to one VM and can request tokens without stored secrets.
Why this is correct
A system-assigned managed identity is attached to one resource and avoids storing any secret in the application.
Related concept
Read the scenario before looking for a memorised answer.
- ✓
User-assigned managed identity, because it can be reused by multiple resources without embedding credentials.
Why this is correct
A user-assigned managed identity can be shared and still provides secretless authentication to storage.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Storage account shared key, because it is the preferred credential when you want to avoid passwords.
Why it's wrong here
A shared key is a secret credential, so it does not meet the no-secrets requirement.
When this WOULD be correct
A question that asks for the simplest way to authenticate a script running on an on-premises server to Azure Storage, where storing a key is acceptable and managed identities are not available.
- ✗
Basic authentication with a storage account name and password, because Azure Storage supports that model directly.
Why it's wrong here
Azure Storage does not use basic username and password authentication for blob access.
When this WOULD be correct
In a scenario where a legacy application requires simple username/password authentication and the storage account is configured to allow basic auth (e.g., using Azure AD with password grant), but this is not standard for Azure Storage.
- ✗
Anonymous public access, because it lets the VM read blobs without any authentication at all.
Why it's wrong here
Anonymous access is only suitable for public content and is not a secure identity-based approach.
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.
✓System-assigned managed identity, because it is tied to one VM and can request tokens without stored secrets.Correct answer▾
Why this is correct
A system-assigned managed identity is attached to one resource and avoids storing any secret in the application.
✗Storage account shared key, because it is the preferred credential when you want to avoid passwords.Wrong answer — click to see why▾
Why this is wrong here
The question requires the VM to authenticate without storing keys or passwords, but a storage account shared key is a secret that must be stored on the VM, violating the requirement.
★ When this WOULD be the correct answer
A question that asks for the simplest way to authenticate a script running on an on-premises server to Azure Storage, where storing a key is acceptable and managed identities are not available.
Why candidates choose this
Candidates may think shared keys are secure because they are not passwords, but they are still secrets that need to be stored, and the question explicitly forbids storing any keys or passwords.
✗Basic authentication with a storage account name and password, because Azure Storage supports that model directly.Wrong answer — click to see why▾
Why this is wrong here
Azure Storage does not support basic authentication with a storage account name and password; it uses shared keys or tokens. The question requires avoiding stored secrets, and basic authentication would still require embedding a password.
★ When this WOULD be the correct answer
In a scenario where a legacy application requires simple username/password authentication and the storage account is configured to allow basic auth (e.g., using Azure AD with password grant), but this is not standard for Azure Storage.
Why candidates choose this
Candidates may confuse Azure Storage authentication with other Azure services that support basic auth, or mistakenly think that storage account name and key are analogous to username and password.
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 managed identities with shared access signatures (SAS) or shared keys, thinking that any identity-based method requires storing a secret, or they incorrectly assume that anonymous access is a valid identity type for application authentication.
Detailed technical explanation
How to think about this question
Under the hood, managed identities leverage the Azure Instance Metadata Service (IMDS) endpoint at 169.254.169.254 to acquire an access token. The VM's managed identity is registered as a service principal in Azure AD, and the token is obtained using OAuth 2.0 client credentials grant flow. In a real-world scenario, this is critical for applications that need to access storage from VMs in a secure, keyless manner, such as a web server reading configuration blobs without embedding secrets in code or configuration files.
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.
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.
- →
Manage Azure Identities and Governance — study guide chapter
Learn the concepts, then practise the questions
- →
Manage Azure Identities and Governance practice questions
Targeted practice on this topic area only
- →
All AZ-104 questions
1,170 questions across all exam domains
- →
AZ-104 study guide
Full concept coverage aligned to exam objectives
- →
AZ-104 practice test guide
How to use practice tests most effectively before exam day
Related practice questions
Related AZ-104 practice-question pages
Use these pages to review the topic behind this question. This is how one missed question becomes focused revision.
Manage Azure Identities and Governance practice questions
Practise AZ-104 questions linked to Manage Azure Identities and Governance.
Implement and Manage Storage practice questions
Practise AZ-104 questions linked to Implement and Manage Storage.
Deploy and Manage Azure Compute practice questions
Practise AZ-104 questions linked to Deploy and Manage Azure Compute.
Implement and Manage Virtual Networking practice questions
Practise AZ-104 questions linked to Implement and Manage Virtual Networking.
Monitor and Maintain Azure Resources practice questions
Practise AZ-104 questions linked to Monitor and Maintain Azure Resources.
AZ-104 Azure RBAC practice questions
Practise AZ-104 questions linked to AZ-104 Azure RBAC.
AZ-104 storage account practice questions
Practise AZ-104 questions linked to AZ-104 storage account.
AZ-104 virtual network practice questions
Practise AZ-104 questions linked to AZ-104 virtual network.
AZ-104 NSG practice questions
Practise AZ-104 questions linked to AZ-104 NSG.
AZ-104 Azure Monitor practice questions
Practise AZ-104 questions linked to AZ-104 Azure Monitor.
AZ-104 backup practice questions
Practise AZ-104 questions linked to AZ-104 backup.
AZ-104 managed identity practice questions
Practise AZ-104 questions linked to AZ-104 managed identity.
Practice this exam
Start a free AZ-104 practice session
Short sessions build daily habit. Longer sessions build exam-day stamina. Try a timed session to simulate real conditions.
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: System-assigned managed identity, because it is tied to one VM and can request tokens without stored secrets. — System-assigned managed identity is correct because it is directly tied to a single VM and can request tokens from Azure AD without storing any secrets or keys. The VM uses its managed identity to authenticate to Azure Storage by obtaining an OAuth 2.0 token, which is then passed to the storage service via the Authorization header. This eliminates the need for any stored credentials, meeting the requirement of not storing keys or passwords.
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
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
Keep practising
More AZ-104 practice questions
- A storage automation service principal must upload, read, and delete blob data in one container by using Microsoft Entra…
- A subnet contains several application servers. You need to allow inbound TCP 3389 only from a management subnet named Su…
- A subscription admin wants to investigate who changed a resource and also review the platform-generated events for that…
- Based on the exhibit, which Azure feature should the administrator use to track this kind of platform-wide service issue…
- An administrator wants a script running on an Azure VM to create a resource in Azure without storing any passwords or cl…
- A PowerShell script runs on an Azure VM every night and uses Azure CLI commands to create tags and VM resources in anoth…
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.
Question Discussion
Share a tip, memory trick, or ask about the reasoning behind this question. Do not post real exam questions, leaked content, braindumps, or copyrighted exam material. Comments are moderated and may be removed without notice.
Sign in to join the discussion.