Quick Answer
The answer is the Authentication methods policy. This is the correct configuration because it provides granular, policy-based control to enforce Microsoft Authenticator via authentication methods policy, allowing administrators to disable legacy methods like SMS and voice calls while enabling only the Microsoft Authenticator app for push notifications or OTP. On the MD-102 exam, this question tests your understanding of the shift from the legacy MFA settings (per-user enforcement) to the modern, centralized Authentication methods policy in the Microsoft Entra admin center—a common trap is confusing this with Conditional Access policies, which control *when* MFA is required, not *which* methods are allowed. Remember the memory tip: “Methods policy picks the tool; Conditional Access sets the rule.”
This MD-102 practice question tests your understanding of manage identity and compliance. 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 Microsoft 365 E3 licenses. They need to enforce that all users must use the Microsoft Authenticator app for MFA instead of SMS or phone call. What should the administrator configure?
MFA service settings in the legacy portal
Why wrong: Legacy settings are being phased out.
Authentication methods policy
This policy controls which methods are allowed.
Security defaults
Why wrong: Security defaults allow any MFA method.
Conditional Access policy
Why wrong: CA controls when MFA is required, not the method.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Authentication methods policy
The Authentication methods policy (B) is the correct configuration because it allows administrators to control exactly which authentication methods users can register and use for MFA. By targeting the policy to all users and disabling SMS and voice call while enabling Microsoft Authenticator (push notifications or OTP), the requirement is met. This policy supersedes legacy MFA settings and provides granular control over modern authentication methods.
Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
MFA service settings in the legacy portal
Why it's wrong here
Legacy settings are being phased out.
Authentication methods policy
Why this is correct
This policy controls which methods are allowed.
Related concept
Read the scenario before looking for a memorised answer.
Security defaults
Why it's wrong here
Security defaults allow any MFA method.
Conditional Access policy
Why it's wrong here
CA controls when MFA is required, not the method.
Common exam traps
The trap here is that candidates often confuse the Authentication methods policy with Conditional Access policies, assuming that a Conditional Access policy can restrict MFA methods, but in reality, Conditional Access only controls when MFA is required, not which methods are allowed.
Detailed technical explanation
The Authentication methods policy in Azure AD uses a REST API and Graph API to manage method registration and usage, with each method (e.g., Microsoft Authenticator, SMS, voice call) having its own enable/disable toggle and target scope. Under the hood, when a user attempts to sign in, the authentication strength is evaluated based on the allowed methods defined in this policy, and the legacy MFA settings are ignored if the policy is configured. In a real-world scenario, if an organization needs to enforce phishing-resistant methods like FIDO2 or certificate-based authentication, the Authentication methods policy is the only place to configure that, as Conditional Access policies cannot restrict method types.
Key takeaway
Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.
Real-world example
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.
What to study next
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Manage identity and compliance — study guide chapter
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FAQ
Manage identity and compliance — This question tests Manage identity and compliance — Read the scenario before looking for a memorised answer..
The correct answer is: Authentication methods policy — The Authentication methods policy (B) is the correct configuration because it allows administrators to control exactly which authentication methods users can register and use for MFA. By targeting the policy to all users and disabling SMS and voice call while enabling Microsoft Authenticator (push notifications or OTP), the requirement is met. This policy supersedes legacy MFA settings and provides granular control over modern authentication methods.
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 11, 2026
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.
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