The correct first step is to create an Azure Key Vault and configure a key encryption key (KEK). Azure Disk Encryption relies on Azure Key Vault to store and manage the encryption secrets or keys that protect your VM disks; without a Key Vault, the encryption service has no secure location to hold the cryptographic material. Specifically, using a KEK adds an extra layer of security by wrapping the disk encryption key, ensuring that even if the secret is compromised, the underlying data remains protected. On the AZ-500 exam, this prerequisite is a frequent trap—candidates often confuse authentication methods like Managed Identities or unrelated services like NSGs or Backup with the core encryption requirement. The exam tests your understanding that encryption begins with key management, not network or identity controls. Remember the mnemonic: “Key Vault first, KEK for the win”—always provision the vault and a key encryption key before enabling disk encryption on any Azure VM.
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.
Your company hosts a web application on Azure Virtual Machines. You need to ensure that all disks attached to the VMs are encrypted. You plan to use Azure Disk Encryption. What should you configure first?
Clue words in this question
Noticing these words before you look at the options changes how you read each choice.
Clue: "first"
Why it matters: Order matters here. You are being tested on which action comes before the others — not which action is generally useful.
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Create an Azure Key Vault and configure a key encryption key
Azure Disk Encryption requires a Key Vault and a key encryption key (KEK) or secret. Option B is correct. Option A is wrong because Managed Identities are used for authentication, not for encryption. Option C is wrong because network security groups are unrelated. Option D is wrong because Azure Backup is for backup, not encryption.
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 a system-assigned managed identity to the VMs
Why it's wrong here
Managed identities are not a prerequisite for Azure Disk Encryption.
✗
Configure a network security group to allow encryption traffic
Why it's wrong here
Network security groups do not affect disk encryption.
✓
Create an Azure Key Vault and configure a key encryption key
Why this is correct
Azure Disk Encryption requires a Key Vault to store the encryption keys or secrets.
Clue confirmation
The clue word "first" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
✗
Enable Azure Backup on the VMs
Why it's wrong here
Azure Backup is not a prerequisite for disk encryption.
Common exam traps
Common exam trap: answer the scenario, not the keyword
Many certification questions include familiar terms but test a specific constraint. Read the exact wording before choosing an answer that is generally true but wrong for this case.
Detailed technical explanation
How to think about this question
This question should be treated as a scenario, not a definition check. Identify the problem, the constraint and the best action. Then compare each option against those facts.
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.
Use explanations to understand the rule behind the answer.
TExam Day Tips
→Underline the problem statement mentally.
→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-500 question in full detail.
Identify which AZ-500 exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
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: Create an Azure Key Vault and configure a key encryption key — Azure Disk Encryption requires a Key Vault and a key encryption key (KEK) or secret. Option B is correct. Option A is wrong because Managed Identities are used for authentication, not for encryption. Option C is wrong because network security groups are unrelated. Option D is wrong because Azure Backup is for backup, not encryption.
What should I do if I get this AZ-500 question wrong?
Identify which AZ-500 exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.
Are there clue words in this question I should notice?
Yes — watch for: "first". Order matters here. You are being tested on which action comes before the others — not which action is generally useful.
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. Your company runs a critical application on Azure Virtual Machines. You need to ensure that the OS disks and data disks are encrypted to meet compliance requirements. The solution must use Azure Key Vault to store encryption keys and support automated backup. What should you implement?
medium
✓ A.Azure Disk Encryption (ADE)
B.Azure Backup with encryption using platform-managed keys
C.Azure Confidential Computing
D.Azure Storage Service Encryption (SSE)
Why A: Option C is correct because Azure Disk Encryption uses BitLocker (Windows) or DM-Crypt (Linux) to encrypt disks and integrates with Azure Key Vault. Option A is wrong because Azure Storage Service Encryption encrypts data at rest in storage accounts, not VM disks. Option B is wrong because Azure Backup does not provide encryption itself. Option D is wrong because Azure Confidential Computing is a different technology for protecting data in use.
Last reviewed: Jun 20, 2026
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This AZ-500 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-500 exam.
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