This MS-102 practice question tests your understanding of implement and manage microsoft entra identity and access. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. 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.
Your organization uses Microsoft Entra ID for identity management. You need to ensure that users can access internal applications using single sign-on (SSO) without storing passwords in the cloud. Which authentication method should you implement?
Federation with AD FS
Why wrong: Federation still uses passwords for on-premises authentication.
Windows Hello for Business
Windows Hello for Business uses asymmetric keys, eliminating passwords.
Password hash synchronization
Why wrong: Password hash sync stores password hashes in Azure AD.
Pass-through authentication
Why wrong: Pass-through authentication still requires users to enter passwords.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Windows Hello for Business
Windows Hello for Business is correct because it enables passwordless single sign-on (SSO) to internal applications using biometric or PIN credentials, with the private key stored on the user's device rather than in the cloud. This meets the requirement of no passwords stored in the cloud while still providing seamless SSO access.
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.
Federation with AD FS
Why it's wrong here
Federation still uses passwords for on-premises authentication.
Windows Hello for Business
Why this is correct
Windows Hello for Business uses asymmetric keys, eliminating passwords.
Related concept
Read the scenario before looking for a memorised answer.
Password hash synchronization
Why it's wrong here
Password hash sync stores password hashes in Azure AD.
Pass-through authentication
Why it's wrong here
Pass-through authentication still requires users to enter passwords.
Common exam traps
The trap here is that candidates often confuse 'no passwords stored in the cloud' with 'no passwords used at all,' leading them to choose Pass-through authentication (which still uses passwords) or Federation (which still relies on passwords), rather than recognizing Windows Hello for Business as the only passwordless option that stores credentials locally on the device.
Detailed technical explanation
Windows Hello for Business uses asymmetric key pairs (public/private) where the private key is stored in the device's Trusted Platform Module (TPM) and never leaves the device, while the public key is registered in Microsoft Entra ID. During SSO, the device proves possession of the private key via a challenge-response protocol, eliminating any password transmission or cloud storage. In a real-world scenario, this allows users to access internal apps like SharePoint or Dynamics 365 without typing a password, even when the device is offline, using cached credentials.
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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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: Windows Hello for Business — Windows Hello for Business is correct because it enables passwordless single sign-on (SSO) to internal applications using biometric or PIN credentials, with the private key stored on the user's device rather than in the cloud. This meets the requirement of no passwords stored in the cloud while still providing seamless SSO access.
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
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