This MS-900 practice question tests your understanding of describe security, compliance, privacy, and trust in microsoft 365. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. A key principle to apply: sensitivity labels classify content based on its sensitivity.. 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.
During requirements gathering, an IT manager says the organization must classify files as Confidential and apply encryption to the most sensitive content. Microsoft security, identity, or compliance capability should it use?
Microsoft Stream
Why wrong: Stream hosts video content and does not meet this requirement.
Microsoft Planner
Why wrong: Planner manages tasks and does not provide this security or compliance control.
Sensitivity labels
Sensitivity labels classify content and can apply encryption and markings.
Microsoft Forms
Why wrong: Forms creates surveys and quizzes, not this security or compliance capability.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Sensitivity labels
Sensitivity labels in Microsoft Purview Information Protection allow organizations to classify files as Confidential and apply encryption automatically or manually. This capability meets the requirement to protect the most sensitive content by enforcing access controls and encryption policies based on the label.
Key principle: Sensitivity labels classify content based on its sensitivity.
Answer analysis
For each option: why learners choose it and why it is or isn't the right answer here.
Microsoft Stream
Why it's wrong here
Stream hosts video content and does not meet this requirement.
Microsoft Planner
Why it's wrong here
Planner manages tasks and does not provide this security or compliance control.
Sensitivity labels
Why this is correct
Sensitivity labels classify content and can apply encryption and markings.
Related concept
Sensitivity labels classify content based on its sensitivity.
Microsoft Forms
Why it's wrong here
Forms creates surveys and quizzes, not this security or compliance capability.
Common exam traps
The trap here is that candidates may confuse Microsoft's collaboration tools (Stream, Planner, Forms) with security/compliance features, overlooking that sensitivity labels are the dedicated mechanism for classification and encryption in Microsoft 365.
Detailed technical explanation
Sensitivity labels can be configured with encryption settings using Azure Information Protection (AIP) to enforce rights management (RMS) templates, such as 'Do Not Forward' or custom permissions. Labels can be applied automatically via auto-labeling policies based on sensitive data types (e.g., credit card numbers) or manually by users in Office apps. In a real-world scenario, a label might encrypt a Word document so that only specific users in the finance team can decrypt it, even if the file is shared externally.
Key takeaway
Sensitivity labels classify content based on its sensitivity.
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
Review sensitivity labels classify content based on its sensitivity., then practise related MS-900 questions on the same topic to reinforce the concept.
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FAQ
Describe security, compliance, privacy, and trust in Microsoft 365 — This question tests Describe security, compliance, privacy, and trust in Microsoft 365 — Sensitivity labels classify content based on its sensitivity..
The correct answer is: Sensitivity labels — Sensitivity labels in Microsoft Purview Information Protection allow organizations to classify files as Confidential and apply encryption automatically or manually. This capability meets the requirement to protect the most sensitive content by enforcing access controls and encryption policies based on the label.
Review sensitivity labels classify content based on its sensitivity., then practise related MS-900 questions on the same topic to reinforce the concept.
Sensitivity labels classify content based on its sensitivity.
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Last reviewed: Jun 11, 2026
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