AZ-204 Practice Question: Connect to and consume Azure services and third-party services
This AZ-204 practice question tests your understanding of connect to and consume azure services and third-party services. 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.
Your company has a set of REST APIs that are exposed through Azure API Management (APIM). One of the backend APIs is secured and requires an OAuth 2.0 access token from Microsoft Entra ID. The APIM instance has a system-assigned managed identity with permissions to request tokens for the backend API's scope. You need to configure APIM to automatically obtain a token and pass it to the backend API when requests come in. What should you do?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Add a set-backend-service policy with the authentication-managed-identity attribute
Option A is correct because the `set-backend-service` policy with the `authentication-managed-identity` attribute allows APIM to use its system-assigned managed identity to obtain an OAuth 2.0 access token from Microsoft Entra ID for the specified backend API scope. This token is automatically attached to the backend request as an Authorization header, enabling secure access without manual token 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.
✓
Add a set-backend-service policy with the authentication-managed-identity attribute
Why this is correct
This policy automatically obtains a token using the managed identity and passes it to the backend as an Authorization header.
Related concept
Read the scenario before looking for a memorised answer.
✗
Configure the backend API's subscription key in policy
Why it's wrong here
Subscription keys are not OAuth tokens and will not authenticate to the backend API that expects a Bearer token.
✗
Use a validate-jwt policy to check incoming token
Why it's wrong here
validate-jwt validates tokens from the client; it does not obtain a token for the backend.
✗
Create a named value with the token and reference it in policy
Why it's wrong here
Named values are static and cannot hold a dynamically obtained token that needs to be refreshed.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates confuse `validate-jwt` (which checks client tokens) with the need to obtain a new token for the backend, or they assume a static token stored in a named value is sufficient, ignoring the dynamic nature of OAuth 2.0 token expiry and managed identity capabilities.
Detailed technical explanation
How to think about this question
Under the hood, the `authentication-managed-identity` policy uses the Azure Instance Metadata Service (IMDS) endpoint to request a token from Microsoft Entra ID (formerly Azure AD) for the resource specified in the `resource` attribute. The token is cached by APIM and automatically refreshed before expiry, ensuring seamless backend authentication. In real-world scenarios, this is critical for APIs that require delegated access to downstream services like Microsoft Graph or custom APIs secured with OAuth 2.0.
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-204 question in full detail.
Connect to and consume Azure services and third-party services — This question tests Connect to and consume Azure services and third-party services — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Add a set-backend-service policy with the authentication-managed-identity attribute — Option A is correct because the `set-backend-service` policy with the `authentication-managed-identity` attribute allows APIM to use its system-assigned managed identity to obtain an OAuth 2.0 access token from Microsoft Entra ID for the specified backend API scope. This token is automatically attached to the backend request as an Authorization header, enabling secure access without manual token management.
What should I do if I get this AZ-204 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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