- A
Data Loss Prevention (DLP)
Why wrong: DLP policies are designed to prevent sensitive information from being shared externally or used inappropriately. They can detect credit card numbers but do not automatically apply retention labels. They may show a policy tip or block sharing.
- B
Insider Risk Management
Why wrong: Insider Risk Management helps detect, investigate, and act on risky insider activities like data theft. It does not automatically apply retention labels based on content.
- C
Communication Compliance
Why wrong: Communication Compliance policies monitor communications (email, Teams) for policy violations such as offensive language or regulatory compliance issues. They do not apply retention labels to documents.
- D
Data Lifecycle Management
Data Lifecycle Management provides auto-apply retention label policies that can use sensitive information types (SITs) to classify and retain content automatically. This is the correct solution to apply a retention label based on content detection.
SC-900 Practice Question: Describe the capabilities of Microsoft compliance solutions
This SC-900 practice question tests your understanding of describe the capabilities of microsoft compliance solutions. 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.
A financial services company is required by the Payment Card Industry Data Security Standard (PCI-DSS) to retain all documents containing credit card numbers for at least seven years. The compliance team has created a custom sensitive information type (SIT) to detect credit card numbers in Microsoft 365. They want to automatically apply a retention label (e.g., "7-Year Retention") to any document in SharePoint or OneDrive that matches this SIT. Which Microsoft Purview solution should they configure to apply the label automatically based on content?
Clue words in this question
Noticing these words before you look at the options changes how you read each choice.
Clue:
"least"Why it matters: You want the option with minimum overhead, fewest steps, or lowest impact — not the most feature-rich or comprehensive answer.
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
Data Lifecycle Management
Data Lifecycle Management (DLM) in Microsoft Purview is the solution specifically designed for automatically applying retention labels based on conditions like sensitive information types (SITs). By creating a retention label policy with auto-labeling rules that reference the custom SIT for credit card numbers, DLM can automatically assign the '7-Year Retention' label to documents in SharePoint and OneDrive that contain PCI-DSS data, ensuring compliance with retention requirements.
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.
- ✗
Data Loss Prevention (DLP)
Why it's wrong here
DLP policies are designed to prevent sensitive information from being shared externally or used inappropriately. They can detect credit card numbers but do not automatically apply retention labels. They may show a policy tip or block sharing.
- ✗
Insider Risk Management
Why it's wrong here
Insider Risk Management helps detect, investigate, and act on risky insider activities like data theft. It does not automatically apply retention labels based on content.
- ✗
Communication Compliance
Why it's wrong here
Communication Compliance policies monitor communications (email, Teams) for policy violations such as offensive language or regulatory compliance issues. They do not apply retention labels to documents.
- ✓
Data Lifecycle Management
Why this is correct
Data Lifecycle Management provides auto-apply retention label policies that can use sensitive information types (SITs) to classify and retain content automatically. This is the correct solution to apply a retention label based on content detection.
Clue confirmation
The clue word "least" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates confuse Data Loss Prevention (DLP) with Data Lifecycle Management because both use sensitive information types, but DLP is for protection (blocking/sharing) while DLM is for governance (retention/deletion).
Trap categories for this question
Command / output trap
DLP policies are designed to prevent sensitive information from being shared externally or used inappropriately. They can detect credit card numbers but do not automatically apply retention labels. They may show a policy tip or block sharing.
Detailed technical explanation
How to think about this question
Under the hood, Data Lifecycle Management uses auto-labeling policies that leverage the same sensitive information types (SITs) as DLP, but the action is to apply a retention label rather than block or alert. The retention label policy can be scoped to specific locations (SharePoint, OneDrive) and uses a schedule-based or event-based trigger to evaluate content; for PCI-DSS, a static retention period of 7 years is set, and the label ensures documents are retained for that duration even if users try to delete them. A subtle behavior is that auto-labeling in DLM applies labels at rest (when documents are created or modified), whereas DLP applies actions in transit or at rest for protection, not lifecycle management.
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.
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FAQ
Questions learners often ask
What does this SC-900 question test?
Describe the capabilities of Microsoft compliance solutions — This question tests Describe the capabilities of Microsoft compliance solutions — Read the scenario before looking for a memorised answer..
What is the correct answer to this question?
The correct answer is: Data Lifecycle Management — Data Lifecycle Management (DLM) in Microsoft Purview is the solution specifically designed for automatically applying retention labels based on conditions like sensitive information types (SITs). By creating a retention label policy with auto-labeling rules that reference the custom SIT for credit card numbers, DLM can automatically assign the '7-Year Retention' label to documents in SharePoint and OneDrive that contain PCI-DSS data, ensuring compliance with retention requirements.
What should I do if I get this SC-900 question wrong?
Identify which exam domain this question belongs to, review the core concept, then practise similar questions from the same domain.
Are there clue words in this question I should notice?
Yes — watch for: "least". You want the option with minimum overhead, fewest steps, or lowest impact — not the most feature-rich or comprehensive answer.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Last reviewed: Jun 11, 2026
This SC-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 SC-900 exam.
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