- A
The creation will fail because the policy is assigned to the Contoso Management Group, and all subscriptions under it must comply.
Why wrong: This is incorrect because an exclusion was explicitly added for the Sales-Dev subscription, removing it from the policy's scope. Exclusions take precedence over inheritance.
- B
The creation will succeed because the policy is assigned only to the Sales and R&D management groups, not directly to subscriptions.
Why wrong: This is incorrect. The policy is assigned to the Contoso Management Group, which is a parent of both Sales and R&D. Policy inheritance means it applies to child management groups and their subscriptions unless excluded.
- C
The creation will succeed because the Sales-Dev subscription is excluded from the policy assignment.
Correct. An exclusion removes the subscription from the policy's evaluation scope. Resources in the excluded subscription are not subject to the policy's effect, so the VM creation is allowed.
- D
The creation will fail because exclusions cannot be applied at the subscription level when the policy is assigned at a management group scope.
Why wrong: This is incorrect. Azure Policy supports exclusions at the subscription level (or even resource group level) when assigning a policy at a higher scope. Exclusions can be used to selectively opt out child scopes.
Quick Answer
The answer is that the virtual machine creation will succeed because the Sales-Dev subscription is excluded from the policy assignment. This is correct because Azure Policy allows exclusions at any child scope when a policy is assigned at a parent management group; an Azure Policy exclusion at subscription level overrides the deny effect inherited from the Contoso Management Group, effectively removing that subscription from the policy’s enforcement scope. On the AZ-900 exam, this scenario tests your understanding of policy inheritance and exclusion behavior within management group hierarchies—a common trap is assuming that a policy assigned higher up always applies to all descendants, but exclusions explicitly break that chain. Remember the memory tip: “Exclusion is the exception—if you’re excluded, the parent policy doesn’t apply to you.”
AZ-900 Describe Azure management and governance Practice Question
This AZ-900 practice question tests your understanding of describe azure management and governance. 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.
A company uses Azure Management Groups to organize subscriptions. The hierarchy is: Root Management Group -> Contoso Management Group -> Sales (management group) and R&D (management group). Under Sales there are two subscriptions: Sales-Prod and Sales-Dev. Under R&D there is one subscription: R&D-Prod. The governance team assigns an Azure Policy definition that denies the creation of resources in the East US region. They assign this policy to the Contoso Management Group, but they add an exclusion for the Sales-Dev subscription. A developer in the Sales-Dev subscription attempts to create a virtual machine in the East US region. What will happen?
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
The creation will succeed because the Sales-Dev subscription is excluded from the policy assignment.
Option C is correct because Azure Policy allows exclusions at any child scope when a policy is assigned at a parent management group. The policy assigned to the Contoso Management Group denies resources in East US, but the Sales-Dev subscription is explicitly excluded from that assignment. Therefore, the developer's virtual machine creation in East US will succeed, as the exclusion overrides the deny effect for that subscription.
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.
- ✗
The creation will fail because the policy is assigned to the Contoso Management Group, and all subscriptions under it must comply.
Why it's wrong here
This is incorrect because an exclusion was explicitly added for the Sales-Dev subscription, removing it from the policy's scope. Exclusions take precedence over inheritance.
- ✗
The creation will succeed because the policy is assigned only to the Sales and R&D management groups, not directly to subscriptions.
Why it's wrong here
This is incorrect. The policy is assigned to the Contoso Management Group, which is a parent of both Sales and R&D. Policy inheritance means it applies to child management groups and their subscriptions unless excluded.
- ✓
The creation will succeed because the Sales-Dev subscription is excluded from the policy assignment.
Why this is correct
Correct. An exclusion removes the subscription from the policy's evaluation scope. Resources in the excluded subscription are not subject to the policy's effect, so the VM creation is allowed.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
The creation will fail because exclusions cannot be applied at the subscription level when the policy is assigned at a management group scope.
Why it's wrong here
This is incorrect. Azure Policy supports exclusions at the subscription level (or even resource group level) when assigning a policy at a higher scope. Exclusions can be used to selectively opt out child scopes.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates may assume exclusions are not allowed when a policy is assigned at a higher scope, or mistakenly think that exclusions only work at the same scope as the assignment, rather than understanding that Azure Policy supports exclusions at any child scope (management group, subscription, or resource group).
Detailed technical explanation
How to think about this question
Azure Policy assignments support an 'exclusion' parameter that removes specific child scopes from policy evaluation. Under the hood, the policy engine evaluates the effective policy set for each scope by combining inherited assignments and exclusions; an excluded subscription is treated as if the policy was never assigned to it. In real-world scenarios, this allows granular control, such as allowing a dev/test subscription to bypass a deny policy that applies to production subscriptions, while still maintaining centralized governance.
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
An e-commerce site experiences heavy traffic on Black Friday and near-zero traffic during off-peak weeks. Rather than provisioning permanent large VMs, the team uses auto-scaling groups that add capacity automatically under load and reduce it overnight. Questions like this test whether you understand elasticity, availability zones, and cloud compute scaling patterns.
What to study next
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FAQ
Questions learners often ask
What does this AZ-900 question test?
Describe Azure management and governance — This question tests Describe Azure management and governance — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: The creation will succeed because the Sales-Dev subscription is excluded from the policy assignment. — Option C is correct because Azure Policy allows exclusions at any child scope when a policy is assigned at a parent management group. The policy assigned to the Contoso Management Group denies resources in East US, but the Sales-Dev subscription is explicitly excluded from that assignment. Therefore, the developer's virtual machine creation in East US will succeed, as the exclusion overrides the deny effect for that subscription.
What should I do if I get this AZ-900 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-900 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-900 exam.
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