Quick Answer
The answer is FIDO2 security keys, Microsoft Authenticator app with phone sign-in, and Windows Hello for Business. These three passwordless authentication methods for Microsoft Entra ID replace passwords with cryptographic key pairs stored on a user’s device, where the private key never leaves the device and signs authentication challenges verified by the public key on the server. On the Microsoft Cybersecurity Architect exam, this question tests your understanding of which Entra ID methods satisfy the “something you have” plus “something you are or know” requirement for true passwordless flows, often appearing in scenario-based items about phishing-resistant authentication. A common trap is confusing SMS or email one-time codes as passwordless—they are not, because they still rely on a shared secret. Remember the mnemonic “F-A-W” (FIDO2, Authenticator, Windows Hello) to recall the three native passwordless options that eliminate the password entirely.
This SC-100 practice question tests your understanding of design solutions that align with security best practices and priorities. 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 company is using Microsoft Entra ID and wants to implement passwordless authentication to improve security. Which THREE authentication methods should you consider?
Microsoft Authenticator app with phone sign-in
Phone sign-in is a passwordless authentication method.
Windows Hello for Business
Windows Hello uses biometrics or PIN, which is passwordless.
FIDO2 security keys
FIDO2 keys are a passwordless method.
SMS one-time passcode
Why wrong: SMS OTP is not passwordless; it's a second factor.
App passwords
Why wrong: App passwords are legacy and not passwordless.
Answer choices
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
Microsoft Authenticator app with phone sign-in
Microsoft Authenticator app with phone sign-in is a passwordless authentication method because it uses a cryptographic key pair stored on the user's device to sign authentication requests, eliminating the need for a password. When the user approves a notification on their phone, the app signs a challenge from Microsoft Entra ID using the private key, and the service verifies it with the public key. This aligns with the passwordless goal by replacing the password with a possession-based factor (the phone) and a biometric or PIN gesture.
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 Authenticator app with phone sign-in
Why this is correct
Phone sign-in is a passwordless authentication method.
Related concept
Read the scenario before looking for a memorised answer.
Windows Hello for Business
Why this is correct
Windows Hello uses biometrics or PIN, which is passwordless.
Related concept
Read the scenario before looking for a memorised answer.
FIDO2 security keys
Why this is correct
FIDO2 keys are a passwordless method.
Related concept
Read the scenario before looking for a memorised answer.
SMS one-time passcode
Why it's wrong here
SMS OTP is not passwordless; it's a second factor.
App passwords
Why it's wrong here
App passwords are legacy and not passwordless.
Common exam traps
The trap here is that candidates confuse 'something you have' (like a phone or SMS) with passwordless, but SMS OTP still requires a password as the first factor in most Entra ID configurations, making it a multi-factor method, not a passwordless one.
Detailed technical explanation
Under the hood, passwordless methods like Windows Hello for Business and FIDO2 security keys use asymmetric key cryptography (e.g., ECDSA with P-256 curves) where the private key never leaves the device, and the public key is registered with Microsoft Entra ID during provisioning. A subtle behavior is that FIDO2 keys support both passwordless and multi-factor authentication modes depending on whether a PIN or biometric is required as a user gesture, which is critical for compliance scenarios like phishing-resistant authentication under Executive Order 14028.
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
Design solutions that align with security best practices and priorities — This question tests Design solutions that align with security best practices and priorities — Read the scenario before looking for a memorised answer..
The correct answer is: Microsoft Authenticator app with phone sign-in — Microsoft Authenticator app with phone sign-in is a passwordless authentication method because it uses a cryptographic key pair stored on the user's device to sign authentication requests, eliminating the need for a password. When the user approves a notification on their phone, the app signs a challenge from Microsoft Entra ID using the private key, and the service verifies it with the public key. This aligns with the passwordless goal by replacing the password with a possession-based factor (the phone) and a biometric or PIN gesture.
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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