The correct answer is to configure Transparent Data Encryption with a customer-managed key in Azure Key Vault and set the Key Vault to automatically rotate that key on a schedule. This works because TDE with a CMK encrypts the database encryption key using a key you control in Key Vault, and Key Vault’s rotation policy allows you to define a schedule—such as every 12 months—to automatically generate a new key version, which TDE then uses without manual intervention. On the AZ-500 exam, this scenario tests your understanding of the “key rotation” requirement for data at rest, often appearing in a select-two format where one trap is choosing manual rotation or a different encryption method like Always Encrypted. Remember the pairing: CMK for TDE handles encryption, while Key Vault’s rotation policy handles the schedule—think “TDE for the lock, Key Vault for the timer.”
AZ-500 Secure compute, storage, and databases Practice Question
This AZ-500 practice question tests your understanding of secure compute, storage, and databases. 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.
A company uses Azure SQL Database. They want to ensure that all data at rest is encrypted using a customer-managed key (CMK) stored in Azure Key Vault. They also require that the key is automatically rotated every 12 months. Which two actions must be configured to meet this requirement? (Select two.)
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Enable Transparent Data Encryption (TDE) with a customer-managed key.
Option A is correct because Transparent Data Encryption (TDE) with a customer-managed key (CMK) stored in Azure Key Vault is the mechanism that encrypts Azure SQL Database data at rest using a key you control. This meets the requirement for CMK-based encryption. Option B is correct because Azure Key Vault supports automatic key rotation on a schedule; by configuring a rotation policy (e.g., every 12 months), the key used for TDE is automatically replaced, satisfying the rotation requirement.
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.
✓
Enable Transparent Data Encryption (TDE) with a customer-managed key.
Why this is correct
This must be configured to use a customer-managed key stored in Azure Key Vault for encrypting the database at rest.
Related concept
Read the scenario before looking for a memorised answer.
✓
Configure Key Vault to automatically rotate the key on a schedule.
Why this is correct
Key Vault supports key rotation policies that can automatically rotate the key every 12 months to meet the requirement.
Related concept
Read the scenario before looking for a memorised answer.
✗
Configure Azure SQL Database auditing to log key usage.
Why it's wrong here
Auditing logs access to the database but does not encrypt data or rotate keys.
✗
Enable Azure Information Protection for the database.
Why it's wrong here
Azure Information Protection is for classification and labeling, not for encryption at rest with CMK.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse Azure SQL Database auditing (which logs activity) with key management, or mistakenly think Azure Information Protection can encrypt database data at rest, when it only applies classification and labeling to files and emails.
Detailed technical explanation
How to think about this question
Under the hood, TDE with CMK uses the key from Azure Key Vault as the TDE protector, which encrypts the database encryption key (DEK). The DEK then encrypts the data pages. Automatic rotation in Key Vault creates a new key version; Azure SQL Database automatically uses the latest key version for new data encryption, while older versions remain available for decrypting existing data. This ensures seamless rotation without downtime, but note that the rotation schedule is managed at the Key Vault level, not within SQL Database itself.
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 cloud solutions architect for a retail company is evaluating services for a new workload. The correct answer here reflects best practice for the specific scenario described — not a general cloud recommendation. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Cloud exam questions reward reading the constraint carefully: the same technology can be right or wrong depending on the use case.
Related glossary terms
Concepts from this question explained
These glossary pages explain the core terms tested in this AZ-500 question in full detail.
Secure compute, storage, and databases — This question tests Secure compute, storage, and databases — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Enable Transparent Data Encryption (TDE) with a customer-managed key. — Option A is correct because Transparent Data Encryption (TDE) with a customer-managed key (CMK) stored in Azure Key Vault is the mechanism that encrypts Azure SQL Database data at rest using a key you control. This meets the requirement for CMK-based encryption. Option B is correct because Azure Key Vault supports automatic key rotation on a schedule; by configuring a rotation policy (e.g., every 12 months), the key used for TDE is automatically replaced, satisfying the rotation requirement.
What should I do if I get this AZ-500 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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