hardMultiple ChoiceObjective-mapped
MD-102 Practice Question: A multinational organization uses Microsoft 365…
A multinational organization uses Microsoft 365 E5 licenses. The compliance officer wants to ensure that all documents containing credit card numbers are automatically classified and protected with a label that applies encryption. You configure auto-labeling policies in Microsoft Purview. After 24 hours, the compliance officer reports that no documents have been labeled. The policy scope is set to 'All locations' and the policy is enabled. What is the most likely cause of the issue?
⚠ Common exam trap
Many exam-takers assume auto-labeling policies apply labels immediately upon creation, overlooking the deliberate simulation mode that Microsoft requires for validation before production deployment.
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 policy is deployed in simulation mode only.
Auto-labeling policies in Microsoft Purview can be configured in simulation mode, which evaluates documents against the policy rules and reports what would be labeled without actually applying any labels. Since the compliance officer reports that no documents have been labeled after 24 hours, the most likely cause is that the policy is still in simulation mode, which is a common deployment step to validate the policy before turning it on for real labeling.
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 policy is deployed in simulation mode only.
Why this is correct
Auto-labeling policies start in simulation mode; you must turn on the policy to apply labels.
- ✗
No sensitivity labels have been published to the users.
Why it's wrong here
Auto-labeling uses labels published by label policy; if not published, labeling fails.
- ✗
Auto-labeling requires Azure Information Protection (AIP) add-on license.
Why it's wrong here
E5 includes auto-labeling; no add-on needed.
- ✗
The priority of the policy is too low compared to other policies.
Why it's wrong here
Priority determines which label wins, not whether labeling occurs.
Go deeper
Related to this question
Learn chapter
Introduction to Endpoint Management in Microsoft 365
Key term
Encryption
Encryption is the process of converting readable data into a secret code to prevent unauthorized access.
Key term
Compliance
Compliance is the process of ensuring that an organization follows laws, regulations, standards, and internal policies that apply to its operations and data handling.
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JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
This MD-102 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 MD-102 exam.