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MS-900 Practice Question: Describe security, compliance, privacy, and trust in Microsoft 365

A security administrator at Contoso wants to ensure that sensitive documents in SharePoint Online are automatically encrypted and access is restricted to specific users, even if the document is shared externally. Which Microsoft 365 feature should the administrator use?

⚠ Common exam trap

The trap here is assuming that SharePoint permissions alone provide encryption, when they only control access within SharePoint and do not persist externally.

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

✓

Sensitivity labels in Microsoft Purview Information Protection

Sensitivity labels in Microsoft Purview Information Protection can automatically apply encryption and access restrictions to documents. When configured, labels can enforce encryption that travels with the document, ensuring that access is restricted even when shared externally. This directly addresses the requirement for automatic encryption and persistent access control.

Answer analysis

Option-by-option breakdown

For each option: why learners choose it and why it is or isn't the right answer here.

  • ✗

    SharePoint Online site-level permissions

    Why it's wrong here

    SharePoint Online site-level permissions control who can access the site and its contents, but they do not encrypt individual documents or enforce encryption when documents are shared externally. Once a document is downloaded or shared outside SharePoint, the permissions no longer apply, so this does not meet the requirement.

  • ✗

    Microsoft Defender for Cloud Apps file policies

    Why it's wrong here

    Microsoft Defender for Cloud Apps file policies can detect and govern sensitive files in cloud apps, but they do not automatically encrypt documents or enforce persistent access restrictions. They are focused on monitoring and controlling cloud app usage, not on embedding encryption and permissions within files.

  • ✓

    Sensitivity labels in Microsoft Purview Information Protection

    Why this is correct

    Sensitivity labels can automatically apply encryption and access restrictions to documents based on the label's configuration. When applied to SharePoint Online, labels can enforce encryption and permissions that persist even when the document is shared externally. This meets the requirement for automatic encryption and restricted access.

  • ✗

    Exchange Online transport rules

    Why it's wrong here

    Exchange Online transport rules are used to inspect and act on email messages, such as applying encryption to emails. They do not apply to documents stored in SharePoint Online, so they cannot automatically encrypt or restrict access to SharePoint documents.

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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

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