Quick Answer
The answer is the Microsoft Authenticator app and FIDO2 security keys. These two methods are passwordless because they replace the traditional password with cryptographic verification—the Authenticator app uses a private key stored on the user’s device to sign a challenge from Microsoft Entra ID, while FIDO2 keys rely on public-key cryptography and a PIN or biometric gesture. On the MS-102 exam, this question tests your understanding of which Entra ID authentication methods eliminate the password entirely, not just reduce its use; a common trap is confusing passwordless with multi-factor authentication methods like SMS or OATH tokens, which still require a password as the first factor. Remember that both the Authenticator app and FIDO2 keys are “something you have” combined with “something you are or know,” making them true passwordless options. For a quick memory tip, think “App and Key—no password for me.”
This MS-102 practice question tests your understanding of implement and manage microsoft entra identity and access. 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.
You are configuring Microsoft Entra ID for your organization. You need to enable passwordless authentication for users. Which TWO authentication methods are passwordless and supported by Microsoft Entra ID?
SMS-based one-time passcode (OTP)
Why wrong: Still requires a one-time code, not fully passwordless.
Hardware OATH tokens
Why wrong: Typically require a PIN, not fully passwordless.
Microsoft Authenticator app
Supports passwordless phone sign-in.
OAuth 2.0 device authorization grant
Why wrong: A protocol, not an authentication method.
FIDO2 security keys
Passwordless and phishing-resistant.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Microsoft Authenticator app
The Microsoft Authenticator app supports passwordless authentication by allowing users to approve sign-in requests via a notification or a number match on their mobile device, eliminating the need for a password. FIDO2 security keys are also a passwordless method, using public-key cryptography to authenticate users without a password, and are fully supported by Microsoft Entra ID for both Azure AD joined and hybrid joined devices.
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.
SMS-based one-time passcode (OTP)
Why it's wrong here
Still requires a one-time code, not fully passwordless.
Hardware OATH tokens
Why it's wrong here
Typically require a PIN, not fully passwordless.
Microsoft Authenticator app
Why this is correct
Supports passwordless phone sign-in.
Related concept
Read the scenario before looking for a memorised answer.
OAuth 2.0 device authorization grant
Why it's wrong here
A protocol, not an authentication method.
FIDO2 security keys
Why this is correct
Passwordless and phishing-resistant.
Related concept
Read the scenario before looking for a memorised answer.
Common exam traps
The trap here is that candidates often confuse multi-factor authentication methods (like SMS OTP or OATH tokens) with passwordless methods, but passwordless requires the primary authentication factor to be something you have or are, not something you know (a password), and both SMS OTP and OATH tokens still require a password as the first factor in most configurations.
Detailed technical explanation
Passwordless authentication in Microsoft Entra ID relies on asymmetric key cryptography: for FIDO2, the private key is stored on the security key and never leaves it, while the public key is registered in Azure AD; during sign-in, the device proves possession of the private key via a challenge-response protocol (WebAuthn). The Microsoft Authenticator app uses a similar model but with a software-based key stored in the device's TPM (Trusted Platform Module) or secure enclave, and the sign-in request is sent via push notification using the Microsoft Authentication Library (MSAL). A subtle behavior is that FIDO2 security keys require Windows 10 version 1903 or later and Azure AD joined or hybrid joined devices, while the Authenticator app works on any device with the app installed.
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
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Implement and manage Microsoft Entra identity and access — study guide chapter
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FAQ
Implement and manage Microsoft Entra identity and access — This question tests Implement and manage Microsoft Entra identity and access — Read the scenario before looking for a memorised answer..
The correct answer is: Microsoft Authenticator app — The Microsoft Authenticator app supports passwordless authentication by allowing users to approve sign-in requests via a notification or a number match on their mobile device, eliminating the need for a password. FIDO2 security keys are also a passwordless method, using public-key cryptography to authenticate users without a password, and are fully supported by Microsoft Entra ID for both Azure AD joined and hybrid joined devices.
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 24, 2026
This MS-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 MS-102 exam.
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