AZ-104 Manage Azure Identities and Governance Practice Question
Your organization wants all subscriptions under the Corp-MG management group to inherit a policy that blocks deployment of resource types not on an approved list. Which Azure feature should you use?
⚠ Common exam trap
Test-takers frequently confuse Azure Policy (which enforces rules on resource properties and types) with Azure RBAC (which controls user permissions), leading candidates to incorrectly choose a custom RBAC role when the question explicitly asks about blocking resource types.
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
✓
Azure Policy assigned at the management group scope
Azure Policy assigned at the management group scope is the correct choice because it allows you to enforce governance rules across all subscriptions within a management group hierarchy. By creating a policy definition that blocks deployment of resource types not on an approved list and assigning it to the Corp-MG management group, the policy will be inherited by all child subscriptions, ensuring consistent compliance without manual configuration per subscription.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
Azure Policy assigned at the management group scope
Why this is correct
Azure Policy's 'Allowed Resource Types' definition, when assigned to the Corp management group, is inherited by every subscription and applies a Deny effect to deployment requests for any resource type not on the approved list. This gives centralized enforcement that travels down the hierarchy, and with policy effects such as Deny or Audit, you can prohibit or flag non-compliant deployments before they are created. Child scopes can be excluded if needed, preserving flexibility.
- ✗
A custom RBAC role assigned at the tenant root
Why it's wrong here
A custom RBAC role assigned at the tenant root only dictates what administrators and users are permitted to do — read, write, delete, or manage access — and never defines which Azure resource types are permissible. In fact, a tenant-root assignment grants permissions across all subscriptions, so if the role includes write actions it would actually make it easier to deploy unapproved resource types. RBAC uses identity-based controls, not resource-type constraints, so this is fundamentally the wrong governance mechanism.
When this WOULD be correct
A custom RBAC role assigned at the tenant root would be correct if the question asked for a way to grant a security team read-only access to all subscriptions in the tenant without assigning roles per subscription.
- ✗
A ReadOnly lock on each subscription
Why it's wrong here
Applying a ReadOnly lock at the subscription level is a blunt, all-or-nothing guard: it blocks all create, write, and delete operations on every resource in that subscription, including deployments that use approved resource types. It cannot be scoped to allow specific resource types while denying others, because locks only enforce an operation restriction, not a catalog of allowed services. Also, locks must be explicitly removed by an authorized user and provide no audit trail of which resource type was blocked.
When this WOULD be correct
A ReadOnly lock would be correct if the question asked: 'You need to prevent accidental deletion or modification of critical resources in a subscription. Which feature should you use?'
- ✗
A budget alert for each subscription
Why it's wrong here
A budget alert watches cumulative spending on a subscription and triggers notifications — or optionally invokes an action group — when forecasted or actual costs cross defined thresholds; it never inspects resource types or rejects a deployment. Budgets are a cost-management tool and are entirely reactive, not proactive governance: your team could still provision any Azure service as long as the account has access and funds remain. Alerting on cost cannot enforce a standard allow-list of resource types.
When this WOULD be correct
A question asks: 'Your organization wants to receive an email notification when any subscription under the Corp-MG management group exceeds its monthly budget. Which Azure feature should you use?' In that scenario, budget alerts assigned at the subscription or management group scope would be correct.
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.
✓Azure Policy assigned at the management group scopeCorrect answer▾
Why this is correct
Azure Policy's 'Allowed Resource Types' definition, when assigned to the Corp management group, is inherited by every subscription and applies a Deny effect to deployment requests for any resource type not on the approved list. This gives centralized enforcement that travels down the hierarchy, and with policy effects such as Deny or Audit, you can prohibit or flag non-compliant deployments before they are created. Child scopes can be excluded if needed, preserving flexibility.
✗A custom RBAC role assigned at the tenant rootWrong answer — click to see why▾
Why this is wrong here
Custom RBAC roles control access permissions, not resource deployment restrictions. They cannot block resource types; Azure Policy is required for that.
★ When this WOULD be the correct answer
A custom RBAC role assigned at the tenant root would be correct if the question asked for a way to grant a security team read-only access to all subscriptions in the tenant without assigning roles per subscription.
Why candidates choose this
Candidates may confuse RBAC with Azure Policy because both involve 'roles' and 'assignments,' and the management group scope suggests a broad control mechanism.
✗A ReadOnly lock on each subscriptionWrong answer — click to see why▾
Why this is wrong here
A ReadOnly lock prevents modifications to resources but does not block deployment of unapproved resource types; it only prevents deletion or modification of existing resources.
★ When this WOULD be the correct answer
A ReadOnly lock would be correct if the question asked: 'You need to prevent accidental deletion or modification of critical resources in a subscription. Which feature should you use?'
Why candidates choose this
Candidates may confuse locks with policy enforcement, thinking a ReadOnly lock can block new deployments, but locks only affect existing resources, not new ones.
✗A budget alert for each subscriptionWrong answer — click to see why▾
Why this is wrong here
Budget alerts monitor spending and trigger notifications, but they cannot block resource deployments or enforce allowed resource type lists. They are a cost management tool, not a policy enforcement mechanism.
★ When this WOULD be the correct answer
A question asks: 'Your organization wants to receive an email notification when any subscription under the Corp-MG management group exceeds its monthly budget. Which Azure feature should you use?' In that scenario, budget alerts assigned at the subscription or management group scope would be correct.
Why candidates choose this
Candidates may confuse cost control with resource governance, thinking that budget alerts can prevent deployments by stopping overspending, but alerts only notify and do not block actions.
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?”
Go deeper
Related to this question
Learn chapter
Privileged Identity Management (PIM)
Key term
Management group
A Management group is a container in Microsoft Azure that helps you organize and manage access, policies, and compliance across multiple Azure subscriptions.
Key term
Policy definition
A policy definition is a formal rule or set of rules that specifies allowed or denied actions on resources within an IT environment, often used for governance, compliance, and security control.
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Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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.