- A
Create a key in Key Vault, assign the storage account's managed identity access to that key, and configure a Key Vault rotation policy to automatically rotate the key regularly
This enables customer-managed keys and automatic key rotation, meeting the requirements.
- B
Enable soft-delete and purge protection on the Key Vault to allow key recovery during rotation
Why wrong: Soft-delete and purge protection are important for data recovery, but they do not automatically rotate keys.
- C
Use Azure Key Vault's default key (system-managed) and rely on built-in rotation
Why wrong: System-managed keys are managed by Azure, not customer-managed. The requirement is for customer-managed keys.
- D
Manually rotate the key every 90 days by generating a new version and updating the storage account
Why wrong: Manual rotation does not meet the 'automatically rotate' requirement.
Quick Answer
The correct configuration is to create a key in Key Vault, assign the storage account’s managed identity access to that key, and configure a Key Vault rotation policy to automatically rotate the key regularly. This works because customer-managed key (CMK) for Azure Storage requires a key stored in Key Vault rather than the default Microsoft-managed key, and the storage account’s managed identity must have ‘Get’, ‘Unwrap Key’, and ‘Wrap Key’ permissions to encrypt and decrypt the account’s root key. The Key Vault rotation policy then automatically creates new key versions on a schedule—such as every 90 days—which the storage account seamlessly picks up without manual intervention. On the AZ-204 exam, this scenario tests your understanding of how to combine managed identities, Key Vault access policies, and the key rotation feature for data at rest encryption; a common trap is forgetting to grant the storage identity explicit wrap/unwrap permissions or assuming system-managed keys support rotation. Remember the three-step mnemonic: Create, Grant, Rotate—the key, the identity, and the policy.
AZ-204 Implement Azure security Practice Question
This AZ-204 practice question tests your understanding of implement azure security. 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 uses Azure Key Vault to manage encryption keys for data at rest in Azure Storage. You need to ensure that the storage account uses a customer-managed key (CMK) stored in Key Vault. Additionally, you need to periodically rotate the key automatically. Which configuration should you implement?
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
Create a key in Key Vault, assign the storage account's managed identity access to that key, and configure a Key Vault rotation policy to automatically rotate the key regularly
Option A is correct because it combines the three essential elements for using a customer-managed key (CMK) with automatic rotation in Azure Key Vault. First, you must create a key in Key Vault (not use the default system-managed key). Second, the storage account's managed identity must be granted 'Get', 'Unwrap Key', and 'Wrap Key' permissions on that key so it can encrypt/decrypt the storage account's root key. Third, you configure a Key Vault rotation policy (using the Azure Key Vault key rotation feature) to automatically create new key versions on a schedule (e.g., every 90 days), which the storage account automatically picks up without manual intervention.
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.
- ✓
Create a key in Key Vault, assign the storage account's managed identity access to that key, and configure a Key Vault rotation policy to automatically rotate the key regularly
Why this is correct
This enables customer-managed keys and automatic key rotation, meeting the requirements.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Enable soft-delete and purge protection on the Key Vault to allow key recovery during rotation
Why it's wrong here
Soft-delete and purge protection are important for data recovery, but they do not automatically rotate keys.
- ✗
Use Azure Key Vault's default key (system-managed) and rely on built-in rotation
Why it's wrong here
System-managed keys are managed by Azure, not customer-managed. The requirement is for customer-managed keys.
- ✗
Manually rotate the key every 90 days by generating a new version and updating the storage account
Why it's wrong here
Manual rotation does not meet the 'automatically rotate' requirement.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse enabling soft-delete/purge protection (which is required for CMK but does not enable rotation) with the actual rotation policy configuration, or they assume that system-managed keys can be used when the question explicitly requires a customer-managed key.
Detailed technical explanation
How to think about this question
Under the hood, Azure Storage uses a root encryption key (KEK) stored in Key Vault and a data encryption key (DEK) that is wrapped by the KEK. When the KEK is rotated (a new version is created), the storage account automatically rewraps the DEK with the new key version without re-encrypting the data. The Key Vault rotation policy uses a time-based trigger (e.g., P90D for 90 days) and can optionally trigger an event via Event Grid to notify the storage account, though the storage account polls for new key versions automatically. This mechanism is defined in the Azure Key Vault key rotation REST API and is distinct from the storage account's own key rotation settings.
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 media company stores terabytes of video archives that are accessed once a year for audit purposes. Moving these objects to a cold storage tier (Azure Archive, S3 Glacier, or Google Nearline) costs a fraction of hot storage. Questions like this test whether you understand storage tiers, access frequency tradeoffs, and retrieval latency requirements.
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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Implement Azure security — study guide chapter
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Implement Azure security practice questions
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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 — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Create a key in Key Vault, assign the storage account's managed identity access to that key, and configure a Key Vault rotation policy to automatically rotate the key regularly — Option A is correct because it combines the three essential elements for using a customer-managed key (CMK) with automatic rotation in Azure Key Vault. First, you must create a key in Key Vault (not use the default system-managed key). Second, the storage account's managed identity must be granted 'Get', 'Unwrap Key', and 'Wrap Key' permissions on that key so it can encrypt/decrypt the storage account's root key. Third, you configure a Key Vault rotation policy (using the Azure Key Vault key rotation feature) to automatically create new key versions on a schedule (e.g., every 90 days), which the storage account automatically picks up without manual intervention.
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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Last reviewed: Jun 11, 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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