The answer is a user-assigned managed identity attached to both VMs. This is the correct choice because a user-assigned managed identity is a standalone Azure resource that exists independently of any single virtual machine, allowing it to be shared across multiple VMs simultaneously. When a VM is deleted and recreated, the identity persists in Azure and can simply be reassigned to the new instance, ensuring continuous access to Azure services without needing to manage credentials or update application configurations. On the AZ-104 exam, this question tests your understanding of managed identity types and their lifecycle—specifically the key difference that system-assigned identities are tied to a single VM’s lifecycle and are destroyed with it, while user-assigned identities are decoupled. A common trap is choosing a system-assigned identity because it seems simpler, but that would break when the VM is rebuilt. Memory tip: think of a user-assigned identity as a shared badge that stays in the office, not a nametag taped to a single employee’s desk.
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 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.
✓
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.
✗
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.
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.
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: 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 →
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. Three VMs run the same batch app and should use the same Azure identity to read blobs. The identity should remain available even if one VM is deleted. Which identity should you use?
easy
A.Shared access signature (SAS) token
B.System-assigned managed identity
✓ C.User-assigned managed identity
D.Storage account shared key
Why C: C is correct because a user-assigned managed identity is an independent Azure resource that persists even if a specific VM is deleted. This allows multiple VMs to share the same identity to authenticate to Azure Blob Storage, ensuring continuous access to blobs as long as at least one VM remains.
Last reviewed: Jun 11, 2026
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