Courseiva
← MS-900
Full test
Question 760 of 985
Describe Microsoft 365 apps and services →hardMultiple ChoiceObjective-mapped

Sensitivity Label Policies — Encryption and Watermarking | Microsoft 365 Fundamentals Explained

This MS-900 practice question tests your understanding of describe microsoft 365 apps and services. This is a configuration task: choose the command set that satisfies every stated requirement. Small differences — like 'secret' vs 'password' or 'transport input ssh' vs 'all' — change whether the answer is correct. 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.

Exhibit

{
  "appliedIntents": ["encrypt", "watermark"],
  "sensitivityLabelId": "S12345",
  "encryption": {
    "encryptedWith": "Microsoft Purview",
    "protectionEnabled": true
  },
  "watermark": {
    "text": "CONFIDENTIAL",
    "visible": true
  }
}

Refer to the exhibit. A JSON snippet from a Microsoft Purview compliance policy. What is the effect of this policy when applied to a document?

Exhibit

{
  "appliedIntents": ["encrypt", "watermark"],
  "sensitivityLabelId": "S12345",
  "encryption": {
    "encryptedWith": "Microsoft Purview",
    "protectionEnabled": true
  },
  "watermark": {
    "text": "CONFIDENTIAL",
    "visible": true
  }
}

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

✓

It encrypts the document and adds a watermark.

The Microsoft Purview sensitivity label policy configures both encryption (via protection settings) and watermarking (via marking settings). When applied to a document, it enforces both actions simultaneously, resulting in the document being encrypted and watermarked. Therefore, option A is correct.

Key principle: Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.

Answer analysis

Option-by-option breakdown

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

  • ✓

    It encrypts the document and adds a watermark.

    Why this is correct

    Both intents are present and enabled.

    Related concept

    Read the scenario before looking for a memorised answer.

  • ✗

    It prevents any sharing of the document.

    Why it's wrong here

    No sharing restriction is defined.

  • ✗

    It only adds a watermark.

    Why it's wrong here

    Both are applied.

  • ✗

    It only encrypts the document.

    Why it's wrong here

    Both encrypt and watermark are applied.

Common exam traps

Common exam trap: answer the scenario, not the keyword

The trap here is that candidates may assume a sensitivity label only performs one action (either encryption or watermarking) and overlook that Microsoft Purview allows combining multiple protection and marking actions in a single label policy.

Detailed technical explanation

How to think about this question

Under the hood, Microsoft Purview sensitivity labels use Azure Information Protection (AIP) to apply encryption via Azure Rights Management (Azure RMS), which enforces usage restrictions like view-only or edit permissions. The watermark is rendered as a persistent overlay (e.g., 'CONFIDENTIAL' text) that is embedded in the document’s visual layer and cannot be removed without breaking the label. In a real-world scenario, a legal department might apply this label to a merger document to ensure only authorized reviewers can open it (encryption) while discouraging screenshots (watermark).

KKey Concepts to Remember

  • Read the scenario before looking for a memorised answer.
  • Find the constraint that changes the correct option.
  • Eliminate answers that are true in general but not in this case.

TExam Day Tips

  • Watch for words such as best, first, most likely and least administrative effort.
  • Review why wrong options are wrong, not only why the correct option is correct.

Key takeaway

Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option.

Real-world example

How this comes up in practice

A cloud solutions architect for a retail company is evaluating services for a new workload. The correct answer here reflects best practice for the specific scenario described — not a general cloud recommendation. Answer the scenario, not the keyword: identify the specific constraint before choosing the most familiar-sounding option. Cloud exam questions reward reading the constraint carefully: the same technology can be right or wrong depending on the use case.

What to study next

Got this wrong? Here's your next step.

Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.

Related practice questions

Related MS-900 practice-question pages

Use these pages to review the topic behind this question. This is how one missed question becomes focused revision.

Describe Microsoft 365 apps and services practice questions

Practise MS-900 questions linked to Describe Microsoft 365 apps and services.

Describe Microsoft 365 pricing, licensing, and support practice questions

Practise MS-900 questions linked to Describe Microsoft 365 pricing, licensing, and support.

Describe cloud concepts practice questions

Practise MS-900 questions linked to Describe cloud concepts.

Describe security, compliance, privacy, and trust in Microsoft 365 practice questions

Practise MS-900 questions linked to Describe security, compliance, privacy, and trust in Microsoft 365.

Describe Microsoft 365 pricing and support practice questions

Practise MS-900 questions linked to Describe Microsoft 365 pricing and support.

MS-900 fundamentals practice questions

Practise MS-900 questions linked to MS-900 fundamentals.

MS-900 scenario practice questions

Practise MS-900 questions linked to MS-900 scenario.

MS-900 troubleshooting practice questions

Practise MS-900 questions linked to MS-900 troubleshooting.

Practice this exam

Start a free MS-900 practice session

Short sessions build daily habit. Longer sessions build exam-day stamina. Try a timed session to simulate real conditions.

10 questions20 questions30 questions50 questionsTimed 30
MS-900 practice-test guide →Study guide →Browse all practice tests

FAQ

Questions learners often ask

What does this MS-900 question test?

Describe Microsoft 365 apps and services — This question tests Describe Microsoft 365 apps and services — Read the scenario before looking for a memorised answer..

What is the correct answer to this question?

The correct answer is: It encrypts the document and adds a watermark. — The Microsoft Purview sensitivity label policy configures both encryption (via protection settings) and watermarking (via marking settings). When applied to a document, it enforces both actions simultaneously, resulting in the document being encrypted and watermarked. Therefore, option A is correct.

What should I do if I get this MS-900 question wrong?

Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.

What is the key concept behind this question?

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 →

How Courseiva writes practice questions · Editorial policy

Keep practising

More MS-900 practice questions

Browse all MS-900 questions →

Last reviewed: Jun 24, 2026

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.

Loading comments…

Sign in to join the discussion.

This MS-900 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-900 exam.