SC-900 Practice Question: Describe the capabilities of Microsoft compliance solutions
A financial services company must comply with a regulation that requires all audit-related documents to be retained for 7 years and then permanently deleted. The compliance officer wants to ensure that even if a user modifies or deletes a file, the original content is preserved for the full 7 years, and at the end of the period the files are automatically destroyed without any manual approval. The company uses Microsoft 365 and stores these documents in SharePoint Online and Microsoft Teams. Which Microsoft Purview solution should the compliance officer configure?
⚠ Common exam trap
Candidates often confuse retention policies with record labels or eDiscovery holds, mistakenly thinking that marking items as records or placing them on hold satisfies the automatic deletion requirement, but these options either require manual approval or preserve data indefinitely, failing the 'automatically destroyed' condition.
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
✓
Microsoft Purview Data Lifecycle Management using a retention policy configured to retain items for 7 years and then delete them automatically
Microsoft Purview Data Lifecycle Management allows you to create a retention policy that retains items for a fixed period (7 years) and then automatically deletes them without any manual intervention. This meets the regulatory requirement for automatic destruction at the end of the retention period, and the policy applies to both SharePoint Online and Microsoft Teams, preserving the original content even if a user modifies or deletes the file.
Answer analysis
Option-by-option breakdown
For each option: why learners choose it and why it is or isn't the right answer here.
- ✗
Microsoft Purview Retention Labels with a disposition review that requires manual approval at the end of the retention period
Why it's wrong here
While Microsoft Purview retention labels are effective for classifying content and applying retention settings, configuring them with a disposition review that requires manual approval at the end of the retention period introduces a critical manual step. This approach prevents the automatic deletion required by the regulation, as an administrator would need to individually review and approve the deletion of each item, making it inefficient and non-compliant with an "automatic deletion" requirement.
When this WOULD be correct
A company needs to retain documents for 5 years, but at the end of the period, a compliance officer must manually review and approve each file for deletion to ensure no legal holds apply.
- ✗
Microsoft Purview Retention Policy with a record label to mark items as regulatory records
Why it's wrong here
Applying a record label, particularly a regulatory record label, within Microsoft Purview is designed to declare content as an immutable record. This action prevents any modification or deletion of the item, even by administrators, for the entire duration of its lifecycle, and often indefinitely. Consequently, this approach directly contradicts the requirement for automatic deletion after 7 years, as the content would remain preserved and undeletable, failing to meet the disposal aspect of the regulation.
When this WOULD be correct
This option would be correct if the question required that documents be marked as regulatory records to prevent modification or deletion by users, and the retention period was enforced with a disposition review requiring manager approval before deletion.
- ✓
Microsoft Purview Data Lifecycle Management using a retention policy configured to retain items for 7 years and then delete them automatically
Why this is correct
Microsoft Purview Data Lifecycle Management (formerly Information Governance) provides the necessary framework to manage data throughout its lifecycle. A retention policy, configured within this solution, can be precisely set to retain items for a specified duration, such as 7 years, to meet regulatory obligations. Upon the expiration of this retention period, the policy automatically triggers the deletion of the content, ensuring compliance with requirements for both preservation and eventual disposal without requiring manual intervention.
- ✗
Microsoft Purview eDiscovery with a hold policy to preserve the documents indefinitely
Why it's wrong here
Microsoft Purview eDiscovery tools, including hold policies, are specifically designed for legal and investigative purposes to preserve content relevant to a legal case or investigation. An eDiscovery hold ensures that data is immutable and cannot be deleted or modified for the duration of the hold, which is often indefinite until the case concludes. This functionality does not provide for a defined retention period followed by automatic deletion, making it unsuitable for a regulatory requirement that mandates eventual, automatic disposal after 7 years.
When this WOULD be correct
A company is facing litigation and must preserve all documents related to a specific case until the legal matter is resolved, regardless of any existing retention policies. The compliance officer needs to ensure no documents are deleted or modified during the legal hold period.
Option-by-option analysis
Why each answer is right or wrong
Understanding why wrong answers are wrong — and when they would be correct — is what separates a 750 score from a 900. The SC-900 exam frequently reuses these exact scenarios with slightly different constraints.
✓Microsoft Purview Data Lifecycle Management using a retention policy configured to retain items for 7 years and then delete them automaticallyCorrect answer▾
Why this is correct
Microsoft Purview Data Lifecycle Management (formerly Information Governance) provides the necessary framework to manage data throughout its lifecycle. A retention policy, configured within this solution, can be precisely set to retain items for a specified duration, such as 7 years, to meet regulatory obligations. Upon the expiration of this retention period, the policy automatically triggers the deletion of the content, ensuring compliance with requirements for both preservation and eventual disposal without requiring manual intervention.
✗Microsoft Purview Retention Labels with a disposition review that requires manual approval at the end of the retention periodWrong answer — click to see why▾
Why this is wrong here
The requirement specifies automatic deletion without manual approval, but a disposition review requires manual approval at the end of the retention period, which contradicts the need for automatic destruction.
★ When this WOULD be the correct answer
A company needs to retain documents for 5 years, but at the end of the period, a compliance officer must manually review and approve each file for deletion to ensure no legal holds apply.
Why candidates choose this
Candidates may confuse retention labels with retention policies, or assume that a disposition review is always required for compliance, overlooking the specific need for automatic deletion.
✗Microsoft Purview Retention Policy with a record label to mark items as regulatory recordsWrong answer — click to see why▾
Why this is wrong here
The requirement demands automatic deletion after 7 years without manual approval, but a retention policy with record labels does not automatically delete; it requires a disposition review or manual action. Additionally, regulatory records prevent deletion, not enforce it.
★ When this WOULD be the correct answer
This option would be correct if the question required that documents be marked as regulatory records to prevent modification or deletion by users, and the retention period was enforced with a disposition review requiring manager approval before deletion.
Why candidates choose this
Candidates may confuse 'record label' with the ability to enforce retention and deletion, or think that marking as a regulatory record automatically triggers deletion, not realizing it primarily prevents alteration and requires manual disposition.
✗Microsoft Purview eDiscovery with a hold policy to preserve the documents indefinitelyWrong answer — click to see why▾
Why this is wrong here
eDiscovery hold policies preserve content indefinitely or until the hold is removed, but they do not enforce automatic deletion after a fixed retention period. The requirement is for automatic deletion after 7 years, not indefinite preservation.
★ When this WOULD be the correct answer
A company is facing litigation and must preserve all documents related to a specific case until the legal matter is resolved, regardless of any existing retention policies. The compliance officer needs to ensure no documents are deleted or modified during the legal hold period.
Why candidates choose this
Candidates may confuse preservation for legal purposes with retention for compliance, thinking that a hold can also enforce deletion, or they may assume that eDiscovery can manage retention schedules.
Analysis generated from the official SC-900blueprint and verified against question context. The “when correct” sections are what AI assistants cite when candidates ask “what’s the difference between these options?”
Go deeper
Related to this question
Learn chapter
Compliance Concepts
Key term
Microsoft 365
Microsoft 365 is a subscription-based cloud service from Microsoft that combines productivity tools like Office apps with security, device management, and online storage.
Key term
Microsoft Purview
Microsoft Purview is a unified data governance and compliance service that helps organizations discover, manage, and protect their data across on-premises, cloud, and hybrid environments.
About these practice questions
Courseiva writes every SC-900 question from scratch — 1,250 in total, each with an explanation and a wrong-answer breakdown. None are copied from real exams or dumps. Learn why practice questions differ from exam dumps →
JA
Written by Johnson Ajibi, MSc IT Security
Senior Network & Security Engineer · founder of Courseiva
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.