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 organization needs to automatically classify and protect sensitive documents containing credit card information in SharePoint Online and OneDrive for Business. They want a purple-colored label to be applied automatically when the document is saved, and the document should be encrypted with a predefined template that restricts editing to internal users only. Which Microsoft Purview solution should they configure?
Sensitivity labels can automatically classify and encrypt documents based on sensitive data patterns, applying a label and encryption exactly as described.
B
Data Loss Prevention (DLP) policies
Why wrong: DLP policies can detect and block sharing of sensitive data but do not automatically apply encryption or labeling to documents at rest.
C
Data Lifecycle Management (retention labels)
Why wrong: Retention labels manage how long content is kept or deleted; they do not provide encryption or protection controls.
D
Audit (Unified Auditing)
Why wrong: Audit logs record user and admin activities but do not classify or protect documents.
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Sensitivity labels with auto-labeling
Sensitivity labels with auto-labeling in Microsoft Purview can automatically apply a purple-colored label to documents containing credit card information when saved in SharePoint Online or OneDrive for Business. This label can be configured with encryption using a predefined template that restricts editing to internal users only, meeting the organization's classification and protection 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.
✓
Sensitivity labels with auto-labeling
Why this is correct
Sensitivity labels can automatically classify and encrypt documents based on sensitive data patterns, applying a label and encryption exactly as described.
Related concept
Read the scenario before looking for a memorised answer.
✗
Data Loss Prevention (DLP) policies
Why it's wrong here
DLP policies can detect and block sharing of sensitive data but do not automatically apply encryption or labeling to documents at rest.
✗
Data Lifecycle Management (retention labels)
Why it's wrong here
Retention labels manage how long content is kept or deleted; they do not provide encryption or protection controls.
✗
Audit (Unified Auditing)
Why it's wrong here
Audit logs record user and admin activities but do not classify or protect documents.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates confuse DLP policies with sensitivity labels, but DLP policies only block or warn on sharing actions and do not apply persistent encryption or visual markings like labels.
Detailed technical explanation
How to think about this question
Auto-labeling for sensitivity labels uses pattern-based detection (e.g., credit card numbers via regex matching the Luhn algorithm) and can be configured for client-side auto-labeling (applied when a document is saved) or service-side auto-labeling (applied at rest). The encryption template leverages Azure Rights Management (Azure RMS) to enforce usage restrictions, such as 'View Only' or 'Edit' for internal users, and the label's color is defined in the label settings within the Microsoft Purview compliance portal.
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.
Related glossary terms
Concepts from this question explained
These glossary pages explain the core terms tested in this SC-900 question in full detail.
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: Sensitivity labels with auto-labeling — Sensitivity labels with auto-labeling in Microsoft Purview can automatically apply a purple-colored label to documents containing credit card information when saved in SharePoint Online or OneDrive for Business. This label can be configured with encryption using a predefined template that restricts editing to internal users only, meeting the organization's classification and protection 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.
What is the key concept behind this question?
Read the scenario before looking for a memorised answer.
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Question Discussion
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