The correct answer is to use Privileged Identity Management (PIM) to activate roles just-in-time and to use managed identities for Azure resources. PIM enforces least-privilege by requiring time-bound, approved role activation, eliminating standing admin access, while managed identities remove the need for stored credentials by allowing Azure resources to authenticate directly to Azure AD via the Instance Metadata Service (IMDS) without any secrets. On the AZ-305 exam, this pairing tests your understanding of identity governance versus credential management—a common trap is to confuse PIM with permanent role assignments or to overlook that managed identities replace service principals with static secrets. Remember the mnemonic: “PIM for time, MI for no crime”—PIM controls when you have access, and Managed Identities eliminate the risk of credential theft.
AZ-305 Practice Question: Design identity, governance, and monitoring solutions
This AZ-305 practice question tests your understanding of design identity, governance, and monitoring solutions. 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.
Which TWO actions should you take to implement a least-privilege identity strategy for Azure resources?
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 the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Use managed identities for Azure resources instead of service principals
Option D is correct because managed identities for Azure resources eliminate the need to store and manage credentials. Azure automatically rotates the identity's principal in Azure AD, and the resource can obtain an access token directly from the Azure Instance Metadata Service (IMDS) endpoint without any secrets. This aligns with the least-privilege principle by removing static, long-lived credentials and reducing the attack surface.
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.
✗
Assign Global Administrator role to all cloud architects
Why it's wrong here
Global Admin is highly privileged, violates least privilege.
✗
Store service principal passwords in Azure Key Vault and retrieve at runtime
Why it's wrong here
Using certificates or managed identities is better.
✗
Enable self-service password reset for all users
Why it's wrong here
SSPR is about password management, not least privilege.
✓
Use managed identities for Azure resources instead of service principals
Why this is correct
Managed identities remove the need to manage secrets.
Clue confirmation
The clue word "least" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
✓
Use Privileged Identity Management (PIM) to activate roles just-in-time
Why this is correct
PIM reduces standing access.
Clue confirmation
The clue word "least" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse storing secrets securely (Option B) with eliminating secrets entirely (Option D), or they overlook that PIM (Option E) is a core least-privilege tool for role activation, not just a monitoring feature.
Detailed technical explanation
How to think about this question
Managed identities use a service principal of a special type that is automatically created in Azure AD and tied to the lifecycle of the Azure resource (e.g., a VM or App Service). The token acquisition flow uses the IMDS endpoint (169.254.169.254) with a non-routable IP, and the token is cached and refreshed automatically. In contrast, Privileged Identity Management (PIM) for Option E provides just-in-time (JIT) activation of Azure AD roles or Azure RBAC roles, enforcing time-bound, approved, or multi-factor-authenticated elevation, which directly reduces standing privileges.
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-305 question in full detail.
Design identity, governance, and monitoring solutions — This question tests Design identity, governance, and monitoring solutions — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Use managed identities for Azure resources instead of service principals — Option D is correct because managed identities for Azure resources eliminate the need to store and manage credentials. Azure automatically rotates the identity's principal in Azure AD, and the resource can obtain an access token directly from the Azure Instance Metadata Service (IMDS) endpoint without any secrets. This aligns with the least-privilege principle by removing static, long-lived credentials and reducing the attack surface.
What should I do if I get this AZ-305 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
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?
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. Which TWO actions should you take to implement a least-privilege identity strategy for Azure resources?
medium
✓ A.Use managed identities for Azure resources instead of service principals with secrets
B.Assign the Contributor role at the subscription scope to allow flexibility
C.Use storage account keys for access to blob data
✓ D.Enable Privileged Identity Management (PIM) for just-in-time role assignments
E.Use a single service principal for all applications
Why A: Managed identities for Azure resources eliminate the need to manage credentials by automatically rotating them and binding them to a resource lifecycle. This removes the risk of secret leakage or mismanagement that exists with service principal secrets, directly supporting a least-privilege identity strategy by ensuring identities are scoped and ephemeral.
Last reviewed: Jun 24, 2026
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