MS-700 Configure and Manage a Teams Environment Practice Question
You are managing external collaboration for your tenant. You want to allow your users to search for and chat with users in another specific organization (domain: contoso.com) but block communication with all other external domains. Which TWO settings must you configure? Each correct answer presents part of the solution.
⚠ Common exam trap
MS-700 often tests the confusion between External Access and Guest Access; candidates may incorrectly select Guest Access settings when the requirement is about chat and search with external users, not team membership.
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
✓
In External access, set the domain access to 'Allow only specific external domains'.
Option A is correct because in Teams External access you must first change the domain access setting from the default to 'Allow only specific external domains' to switch from allowing all federated domains to a restricted allow-list model. Option B is correct because after selecting that mode you must explicitly add contoso.com to the allowed domains list, which enables Teams federation (chat, calls, presence) with users in that specific organization while blocking all others. Options C and E are incorrect because guest access and SharePoint external sharing govern guest accounts and file sharing, not federated chat/search with external Teams users. Option D is incorrect because 'Block all external domains' would prevent communication with contoso.com as well, contradicting the requirement.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✓
In External access, set the domain access to 'Allow only specific external domains'.
Why this is correct
Setting the domain access to 'Allow only specific external domains' changes the default behavior of the tenant from 'Open' to 'Restricted'. This ensures that the system will automatically block communication with any domain that is not explicitly added to the allowed list, providing a high level of security.
- ✓
In External access, add 'contoso.com' to the list of allowed domains.
Why this is correct
Once the policy is set to allow only specific domains, you must explicitly add 'contoso.com' to the list. This creates the exception that allows your users to search, chat, and call users from that specific domain while the overarching policy continues to block all other unlisted domains.
- ✗
In Guest access, set 'Allow guest access in Teams' to Off.
Why it's wrong here
Guest access and External access are two different features. Turning off guest access would prevent external users from being invited as members into your teams, but it does not control the federated chat and calling capabilities that are managed under the External access (federation) settings.
- ✗
In External access, set the domain access to 'Block all external domains'.
Why it's wrong here
Setting the policy to 'Block all external domains' would prevent communication with every external organization, including contoso.com. This setting overrides any allowed list and completely disables federation, making it impossible for users to collaborate with the partner domain specified in the requirements.
- ✗
In the Microsoft 365 admin center, disable 'External sharing' for SharePoint.
Why it's wrong here
SharePoint external sharing settings control how files and folders are shared with people outside the organization. While related to collaboration, these settings do not govern the ability of Teams users to engage in federated chat or calls with users from other domains.
About these practice questions
This MS-700 question is part of Courseiva's 211-question bank — original exam-style content with full explanations and wrong-answer analysis, never real exam questions or exam dumps. Learn why practice questions differ from exam dumps →
JA
Written and reviewed by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
Last reviewed September 2026 · checked against the official Microsoft exam blueprint
This MS-700 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 MS-700 exam.