This MS-102 practice question tests your understanding of implement and manage microsoft entra identity and access. The scenario asks you to isolate a root cause — eliminate options that address a different problem before choosing. 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 implementing Microsoft Entra Verified ID to issue verifiable credentials to employees for proof of employment. Which component is required to issue and verify credentials?
Microsoft Entra ID P2 licenses for all users
Why wrong: P2 is not required for Verified ID.
A certificate from a public certificate authority (CA)
Why wrong: Verified ID uses DIDs, not certificates.
An Azure AD B2C tenant
Why wrong: B2C is for external customers.
A decentralized identifier (DID) and a trusted identity system
DIDs are fundamental to Verified ID.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
A decentralized identifier (DID) and a trusted identity system
Microsoft Entra Verified ID uses a decentralized identity model where each issuer and verifier has a unique decentralized identifier (DID) and a trusted identity system (such as a blockchain-based ION network or a web-based DID method) to publish and resolve DID documents. The DID and the trusted identity system are the core components required to cryptographically sign verifiable credentials and verify them without relying on a central authority, making option D correct.
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.
Microsoft Entra ID P2 licenses for all users
Why it's wrong here
P2 is not required for Verified ID.
A certificate from a public certificate authority (CA)
Why it's wrong here
Verified ID uses DIDs, not certificates.
An Azure AD B2C tenant
Why it's wrong here
B2C is for external customers.
A decentralized identifier (DID) and a trusted identity system
Why this is correct
DIDs are fundamental to Verified ID.
Related concept
Read the scenario before looking for a memorised answer.
Common exam traps
The trap here is that candidates often assume a traditional PKI certificate or a premium license is required, but Microsoft Entra Verified ID relies on decentralized identifiers (DIDs) and a trusted identity system, not on CA-issued certificates or specific license tiers.
Detailed technical explanation
Under the hood, the DID is a globally unique identifier that resolves to a DID document containing public keys and service endpoints. The trusted identity system (e.g., ION on Bitcoin or web-based did:web) ensures that the DID document is tamper-proof and publicly resolvable. When issuing a credential, the issuer signs it with its private key; the verifier uses the DID to fetch the public key from the DID document and cryptographically verify the signature, enabling offline and cross-domain verification without a central registry.
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
Learn the concepts, then practise the questions
Implement and manage Microsoft Entra identity and access practice questions
Targeted practice on this topic area only
All MS-102 questions
975 questions across all exam domains
Microsoft 365 Administrator MS-102 study guide
Full concept coverage aligned to exam objectives
MS-102 practice test guide
How to use practice tests most effectively before exam day
Related practice questions
Use these pages to review the topic behind this question. This is how one missed question becomes focused revision.
Practise MS-102 questions linked to Deploy and manage a Microsoft 365 tenant.
Practise MS-102 questions linked to Implement and manage Microsoft Entra identity and access.
Practise MS-102 questions linked to Manage security and threats by using Microsoft Defender XDR.
Practise MS-102 questions linked to Manage compliance by using Microsoft Purview.
Practise MS-102 questions linked to Manage users, groups, licensing, and support.
Practise MS-102 questions linked to Implement and manage identity and access in Microsoft Entra ID.
Practise MS-102 questions linked to MS-102 fundamentals.
Practise MS-102 questions linked to MS-102 scenario.
Practise MS-102 questions linked to MS-102 troubleshooting.
Practice this exam
Short sessions build daily habit. Longer sessions build exam-day stamina. Try a timed session to simulate real conditions.
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: A decentralized identifier (DID) and a trusted identity system — Microsoft Entra Verified ID uses a decentralized identity model where each issuer and verifier has a unique decentralized identifier (DID) and a trusted identity system (such as a blockchain-based ION network or a web-based DID method) to publish and resolve DID documents. The DID and the trusted identity system are the core components required to cryptographically sign verifiable credentials and verify them without relying on a central authority, making option D correct.
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.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
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.
Question Discussion
Share a tip, memory trick, or ask about the reasoning behind this question. Do not post real exam questions, leaked content, braindumps, or copyrighted exam material. Comments are moderated and may be removed without notice.
Sign in to join the discussion.