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.
Several Azure VMs need the same Azure identity so they can access a shared resource without storing passwords. The identity should be reusable across VMs and removable centrally. Which identity type should the administrator use?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
User-assigned managed identity
A user-assigned managed identity is the correct choice because it is created as a standalone Azure resource, can be assigned to multiple VMs simultaneously, and can be centrally removed or updated without affecting the VMs themselves. This identity is reusable across VMs and eliminates the need to store passwords or secrets in code or configuration.
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
Why it's wrong here
System-assigned identities are tied to one resource and are not shared across multiple VMs.
✓
User-assigned managed identity
Why this is correct
User-assigned identities can be attached to multiple resources and managed independently of the VMs.
Related concept
Read the scenario before looking for a memorised answer.
✗
Service principal with a client secret
Why it's wrong here
A service principal can work, but secrets increase administrative overhead and rotation risk.
✗
Local administrator account
Why it's wrong here
A local account stays on the VM and is not the secure Azure identity pattern here.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often choose system-assigned managed identity because it is simpler to configure, but they overlook the requirement for the identity to be reusable across multiple VMs, which only user-assigned managed identities support.
Detailed technical explanation
How to think about this question
User-assigned managed identities are implemented as Azure AD service principals that can be assigned to multiple Azure resources via ARM role assignments. Under the hood, Azure automatically rotates the associated certificate every 90 days, and the Azure Instance Metadata Service (IMDS) endpoint (169.254.169.254) provides OAuth 2.0 tokens to each VM without any secret exposure. This design supports scenarios like a batch processing cluster where all VMs need to authenticate to the same Azure Key Vault or storage account.
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 company's IT admin needs to give a contractor read-only access to production logs without sharing account credentials. Using role-based access control (RBAC) and temporary scoped permissions — not a permanent shared password — is the correct pattern. Questions like this test whether you can apply least-privilege access across cloud identity services.
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: User-assigned managed identity — A user-assigned managed identity is the correct choice because it is created as a standalone Azure resource, can be assigned to multiple VMs simultaneously, and can be centrally removed or updated without affecting the VMs themselves. This identity is reusable across VMs and eliminates the need to store passwords or secrets in code or configuration.
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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