- A
A system-assigned managed identity on one of the VMs
Why wrong: System-assigned identities are bound to one specific VM and are removed with that VM.
- B
A user-assigned managed identity attached to both VMs
User-assigned identities are independent Azure resources that can be shared across VMs and survive VM recreation.
- C
A service principal with a client secret stored on each VM
Why wrong: Client secrets create operational risk and fail the requirement to avoid stored credentials.
- D
A certificate uploaded to each VM and used for Azure sign-in
Why wrong: Certificates still require lifecycle management and are not the cleanest shared identity approach here.
Question 854 of 1,170
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 team operates two Azure VMs that both need to call Azure services with the same identity. The VMs are rebuilt frequently, and the identity must continue to work if either VM is deleted and recreated. Which identity should the administrator attach?
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
✓
A user-assigned managed identity attached to both VMs
A user-assigned managed identity is the correct choice because it is a standalone Azure resource that can be attached to multiple VMs. When a VM is deleted and recreated, the identity persists independently and can be reassigned to the new VM, ensuring continuous access to Azure services without credential management.
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.
- ✗
A system-assigned managed identity on one of the VMs
Why it's wrong here
System-assigned identities are bound to one specific VM and are removed with that VM.
When this WOULD be correct
A question where only one VM needs an identity, and the VM is never deleted (or the identity is recreated automatically when the VM is recreated), and there is no requirement for the identity to survive VM deletion or be shared.
- ✓
A user-assigned managed identity attached to both VMs
Why this is correct
User-assigned identities are independent Azure resources that can be shared across VMs and survive VM recreation.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
A service principal with a client secret stored on each VM
Why it's wrong here
Client secrets create operational risk and fail the requirement to avoid stored credentials.
When this WOULD be correct
This option would be correct in a scenario where the VMs are long-lived, not frequently rebuilt, and the administrator needs to use the same identity for on-premises or multi-cloud resources that do not support managed identities, requiring explicit credential storage.
- ✗
A certificate uploaded to each VM and used for Azure sign-in
Why it's wrong here
Certificates still require lifecycle management and are not the cleanest shared identity approach here.
When this WOULD be correct
A question where the requirement is to authenticate to Azure services using a certificate-based service principal, and the VMs are long-lived (not frequently rebuilt), with no need for automatic identity continuity across VM deletion/recreation.
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.
✓A user-assigned managed identity attached to both VMsCorrect answer▾
Why this is correct
User-assigned identities are independent Azure resources that can be shared across VMs and survive VM recreation.
✗A system-assigned managed identity on one of the VMsWrong answer — click to see why▾
Why this is wrong here
A system-assigned managed identity is tied to the lifecycle of a single VM. If that VM is deleted, the identity is also deleted, so it cannot persist across VM recreations or be shared with another VM.
★ When this WOULD be the correct answer
A question where only one VM needs an identity, and the VM is never deleted (or the identity is recreated automatically when the VM is recreated), and there is no requirement for the identity to survive VM deletion or be shared.
Why candidates choose this
Candidates may think system-assigned managed identity is simpler and sufficient, overlooking the requirement for identity persistence across VM deletion and sharing between two VMs.
✗A service principal with a client secret stored on each VMWrong answer — click to see why▾
Why this is wrong here
A service principal with a client secret stored on each VM requires manual secret management and rotation; if a VM is deleted, the secret is lost, and the identity cannot persist across VM recreations without manual intervention.
★ When this WOULD be the correct answer
This option would be correct in a scenario where the VMs are long-lived, not frequently rebuilt, and the administrator needs to use the same identity for on-premises or multi-cloud resources that do not support managed identities, requiring explicit credential storage.
Why candidates choose this
Candidates may think a service principal is the standard way to provide an identity for Azure services, and storing the secret on each VM seems straightforward, overlooking the management overhead and lack of resilience to VM deletion.
✗A certificate uploaded to each VM and used for Azure sign-inWrong answer — click to see why▾
Why this is wrong here
Certificates uploaded to each VM are not managed identities; they require manual rotation and secure storage, and if a VM is deleted and recreated, the certificate must be re-uploaded, breaking the identity continuity.
★ When this WOULD be the correct answer
A question where the requirement is to authenticate to Azure services using a certificate-based service principal, and the VMs are long-lived (not frequently rebuilt), with no need for automatic identity continuity across VM deletion/recreation.
Why candidates choose this
Candidates may think certificates provide a secure, persistent identity that can be reused, but they overlook the operational overhead and lack of automatic lifecycle management compared to managed identities.
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 system-assigned and user-assigned managed identities, assuming a system-assigned identity can be shared or persist after VM deletion, when in fact only user-assigned identities are decoupled from the VM lifecycle and can be attached to multiple resources.
Detailed technical explanation
How to think about this question
User-assigned managed identities are implemented as Azure AD service principals of type 'Managed Identity' that can be assigned to Azure resources via Azure Resource Manager. The Azure Instance Metadata Service (IMDS) endpoint (169.254.169.254) is used by the VM to obtain an access token without any secrets stored locally. This design supports scenarios like multi-tier applications where multiple VMs need the same identity to access Azure Key Vault or Azure Storage, and it survives VM rebuilds because the identity resource itself is not deleted.
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.
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.
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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: A user-assigned managed identity attached to both VMs — A user-assigned managed identity is the correct choice because it is a standalone Azure resource that can be attached to multiple VMs. When a VM is deleted and recreated, the identity persists independently and can be reassigned to the new VM, ensuring continuous access to Azure services without credential management.
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 →
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Last reviewed: Jun 11, 2026
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