- A
Create a new VM and install the Key Vault extension during provisioning.
Why wrong: The extension can be enabled on existing VMs; a new VM is not required.
- B
Configure the application to read the connection string from a local file that is updated by the Key Vault extension.
The extension can write the secret to a local file, which the app reads.
- C
Assign a managed identity to the legacy application.
Why wrong: Legacy applications cannot be assigned managed identities; the VM itself gets the identity.
- D
Use a user-assigned managed identity and assign it to the VM.
Why wrong: A system-assigned identity is sufficient; user-assigned is not necessary.
- E
Enable the Azure Key Vault VM extension for the virtual machine.
The extension can sync secrets to the VM as files, allowing the legacy app to read them.
Quick Answer
The correct answer is to enable the Azure Key Vault VM extension and configure the legacy application to read the connection string from a local file. This works because the Key Vault extension automatically syncs secrets and certificates as files on the VM’s file system, allowing unmodifiable legacy applications to access them without code changes. The extension uses the VM’s system-assigned managed identity to authenticate to Key Vault, adhering to least privilege by granting only the VM identity access to the specific secret. On the AZ-204 exam, this scenario tests your understanding of integrating Key Vault with non-cloud-native workloads, often appearing as a distractor where candidates mistakenly assign a managed identity directly to the application or require a user-assigned identity. A common trap is thinking the app itself needs the identity, but the extension acts as the bridge. Memory tip: “Extension reads, app feeds” — the extension fetches the secret, and the app reads the resulting local file.
AZ-204 Implement Azure security Practice Question
This AZ-204 practice question tests your understanding of implement azure security. The scenario asks you to isolate a root cause — eliminate options that address a different problem before choosing. 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.
Which TWO actions should you take to securely store and access secrets for a legacy application that cannot be modified? The application runs on an Azure Virtual Machine and needs to read a database connection string. The solution must use Azure Key Vault and adhere to the principle of least privilege.
Clue words in this question
Noticing these words before you look at the options changes how you read each choice.
Clue:
"least"Why it matters: You want the option with minimum overhead, fewest steps, or lowest impact — not the most feature-rich or comprehensive answer.
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
Configure the application to read the connection string from a local file that is updated by the Key Vault extension.
Option A is correct because Key Vault VM extension automatically syncs certificates and secrets as files, but for connection strings, the application still needs to read the file. Option C is correct because the application can be configured to read the connection string from a local file that is synced by the extension. Option B is wrong because managed identity is assigned to the VM, not the app; the extension uses the VM's identity. Option D is wrong because enabling the extension with a system-assigned managed identity is sufficient; a user-assigned identity is not required. Option E is wrong because the extension can be enabled on existing VMs.
Key principle: Authentication proves identity; authorization controls what that identity can do after login. Both must work for full privileged access.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Create a new VM and install the Key Vault extension during provisioning.
Why it's wrong here
The extension can be enabled on existing VMs; a new VM is not required.
- ✓
Configure the application to read the connection string from a local file that is updated by the Key Vault extension.
Why this is correct
The extension can write the secret to a local file, which the app reads.
Clue confirmation
The clue word "least" in the question point toward this answer.
Related concept
Authentication checks who the user is.
- ✗
Assign a managed identity to the legacy application.
Why it's wrong here
Legacy applications cannot be assigned managed identities; the VM itself gets the identity.
- ✗
Use a user-assigned managed identity and assign it to the VM.
Why it's wrong here
A system-assigned identity is sufficient; user-assigned is not necessary.
- ✓
Enable the Azure Key Vault VM extension for the virtual machine.
Why this is correct
The extension can sync secrets to the VM as files, allowing the legacy app to read them.
Clue confirmation
The clue word "least" in the question point toward this answer.
Related concept
Authentication checks who the user is.
Common exam traps
Common exam trap: authentication is not authorization
Logging in proves the user can authenticate. It does not automatically mean the user is allowed to enter privileged or configuration mode. Watch for AAA authorization, privilege level and command authorization details.
Detailed technical explanation
How to think about this question
This kind of question is testing the difference between identity and permission. A user may successfully log in to a router because authentication is working, but still fail to enter configuration mode because authorization is missing, misconfigured or mapped to a lower privilege level.
KKey Concepts to Remember
- Authentication checks who the user is.
- Authorization controls what the user is allowed to do after login.
- Privilege levels affect access to EXEC and configuration commands.
- AAA, TACACS+ and RADIUS can separate login success from command access.
TExam Day Tips
- Do not assume successful login means full administrative access.
- Look for words such as cannot enter configuration mode, privilege level, authorization or command access.
- Separate login problems from permission problems before choosing the answer.
Key takeaway
Authentication proves identity; authorization controls what that identity can do after login. Both must work for full privileged access.
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.
Review Cisco AAA concepts — authentication, authorization, and accounting. Study privilege levels (0–15), command authorization under TACACS+, and how RADIUS differs. Then practise related AZ-204 questions on access control and AAA configuration.
- →
Implement Azure security — study guide chapter
Learn the concepts, then practise the questions
- →
Implement Azure security practice questions
Targeted practice on this topic area only
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All AZ-204 questions
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- →
Microsoft Azure Developer Associate AZ-204 study guide
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AZ-204 practice test guide
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FAQ
Questions learners often ask
What does this AZ-204 question test?
Implement Azure security — This question tests Implement Azure security — Authentication checks who the user is..
What is the correct answer to this question?
The correct answer is: Configure the application to read the connection string from a local file that is updated by the Key Vault extension. — Option A is correct because Key Vault VM extension automatically syncs certificates and secrets as files, but for connection strings, the application still needs to read the file. Option C is correct because the application can be configured to read the connection string from a local file that is synced by the extension. Option B is wrong because managed identity is assigned to the VM, not the app; the extension uses the VM's identity. Option D is wrong because enabling the extension with a system-assigned managed identity is sufficient; a user-assigned identity is not required. Option E is wrong because the extension can be enabled on existing VMs.
What should I do if I get this AZ-204 question wrong?
Review Cisco AAA concepts — authentication, authorization, and accounting. Study privilege levels (0–15), command authorization under TACACS+, and how RADIUS differs. Then practise related AZ-204 questions on access control and AAA configuration.
Are there clue words in this question I should notice?
Yes — watch for: "least". You want the option with minimum overhead, fewest steps, or lowest impact — not the most feature-rich or comprehensive answer.
What is the key concept behind this question?
Authentication checks who the user is.
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Last reviewed: Jun 20, 2026
This AZ-204 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-204 exam.
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