Describe the capabilities of Microsoft compliance solutions →hardMultiple ChoiceObjective-mapped

SC-900 Practice Question: Describe the capabilities of Microsoft compliance solutions

Exhibit

Refer to the exhibit.

{
  "LabelId": "1f2e3d4c-5b6a-7c8d-9e0f-1a2b3c4d5e6f",
  "DisplayName": "Highly Confidential",
  "Tooltip": "This label is for highly confidential data.",
  "AutoLabeling": {
    "Enabled": true,
    "Rules": [
      {
        "Condition": {
          "SensitiveInformation": {
            "SensitiveInfoTypeId": "Custom_PII_Type",
            "Count": 1
          }
        },
        "Behavior": "Apply"
      }
    ]
  },
  "Protection": {
    "Encryption": {
      "Enabled": true,
      "EncryptionMethod": "AES256"
    }
  }
}

A company deploys a sensitivity label as shown in the exhibit. The custom sensitive information type 'Custom_PII_Type' is configured to detect employee IDs. What happens when a user creates a new document in SharePoint Online that contains an employee ID?

⚠ Common exam trap

Candidates often confuse auto-labeling with manual labeling or assume encryption automatically blocks external sharing, but auto-labeling applies the label without user intervention, and encryption must be explicitly configured to restrict sharing.

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

✓

The document is automatically labeled 'Highly Confidential' and encrypted.

The sensitivity label is configured for auto-labeling with a condition that detects the custom sensitive information type 'Custom_PII_Type'. When a user creates a document in SharePoint Online containing an employee ID, Microsoft 365 automatically applies the 'Highly Confidential' label and enforces encryption as defined in the label policy, without requiring manual user action.

Answer analysis

Option-by-option breakdown

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

✗
The user is prompted to manually apply the label.
Why it's wrong here
If auto-labeling is configured for the 'Highly Confidential' label, the system automatically detects content matching predefined conditions and applies the label without user intervention. This bypasses any manual prompting, as the intent of auto-labeling is to ensure consistent classification and protection silently in the background. Manual application is a distinct user action, not triggered when auto-labeling is active and successful.
✗
The document is blocked from being shared externally.
Why it's wrong here
Sensitivity labels primarily focus on classifying and protecting data through encryption and content marking, not inherently blocking sharing actions. While a Data Loss Prevention (DLP) policy could be configured to prevent external sharing of documents with this label, the label itself does not directly perform the blocking action. The encryption applied by the label restricts who can *access* the content, but doesn't prevent the *act* of sharing the encrypted file.
✓
The document is automatically labeled 'Highly Confidential' and encrypted.
Why this is correct
Given the configuration for auto-labeling, the system will automatically identify documents meeting the specified conditions and apply the 'Highly Confidential' sensitivity label. Concurrently, the label's policy dictates that the document will be encrypted, ensuring that only authorized users with the correct permissions can access its content. This dual action of automatic classification and protection is a core function of sensitivity labels.
✗
The document is deleted automatically.
Why it's wrong here
Sensitivity labels are designed for data classification, protection, and, in conjunction with retention labels, managing data lifecycle through retention or deletion *after* a specified period. However, a sensitivity label's primary function does not include the immediate or automatic deletion of documents upon application. Deletion is typically a separate action governed by retention policies or manual user commands, not an inherent protective measure of a sensitivity label.

Go deeper

SC-900 Practice Question: Describe the capabilities of Microsoft compliance solutions

Exhibit

Why each option matters

Option-by-option breakdown

Related to this question