Question 435 of 1,411

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

Quick Answer

The answer is to create and publish the sensitivity label first. Before you can configure auto-labeling for PHI detection, the label itself must exist and be published to users and groups, as auto-labeling policies can only reference labels that are already available. This tests your understanding of the dependency chain in Microsoft Purview Information Protection: you cannot apply what does not yet exist. On the SC-900 exam, a common trap is selecting an option like configuring an auto-labeling policy or a retention label first, but the label creation and publication is the foundational step. Remember the mnemonic "Label Before Policy" — you must build the tool before you can automate its use.

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.

As a compliance administrator for Contoso Ltd., you are responsible for implementing Microsoft Purview solutions to meet regulatory requirements. The organization operates in the healthcare sector and handles Protected Health Information (PHI). Your key objectives are: (1) Automatically detect PHI in documents stored in SharePoint Online and OneDrive for Business using built-in sensitive information types. (2) Apply a 'Highly Confidential - PHI' sensitivity label that encrypts the content and adds a custom header. (3) Ensure that the label is automatically applied when PHI is detected, with a policy that allows users to override the label with justification. (4) Audit all label application activities for compliance reporting. (5) Retain documents containing PHI for a minimum of 7 years. You have access to Microsoft Purview compliance portal. Which action should you take FIRST to achieve these objectives?

Clue words in this question

Noticing these words before you look at the options changes how you read each choice.

Clue: "first"
Why it matters: Order matters here. You are being tested on which action comes before the others — not which action is generally useful.
Clue: "minimum / minimize"
Why it matters: Asks for the least resource use — fewest addresses, smallest subnet, lowest overhead. Eliminate over-provisioned options even if they would technically work.

Question 1hardmultiple choice

Full question →

A
Create an auto-labeling policy in Microsoft Purview that applies the sensitivity label to documents containing PHI.
Why wrong: Incorrect: The label must exist and be published before it can be used in an auto-labeling policy.
B
Enable auditing in Microsoft Purview by turning on Audit logging.
Why wrong: Incorrect: Audit is already enabled by default for organizations with appropriate licenses. It can be verified later, but not the first step.
C
Create a sensitivity label named 'Highly Confidential - PHI' with encryption and header, and publish it to users and groups.
Correct: The label must be created and published before it can be applied automatically.
D
Create a retention label and policy to retain documents containing PHI for 7 years.
Why wrong: Incorrect: Retention is a separate requirement; the first step is to create the sensitivity label.

Full breakdown with real-world context →

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

✓

Create a sensitivity label named 'Highly Confidential - PHI' with encryption and header, and publish it to users and groups.

The first step is to create the sensitivity label with the required encryption and header settings and publish it so that it can be used in auto-labeling policies. Auto-labeling policies can then be configured to apply the label based on sensitive info types, with user override. Retention labels and policies are separate and can be configured later. Audit is enabled by default but should be verified. Therefore, option C is the correct first action.

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.

✗
Create an auto-labeling policy in Microsoft Purview that applies the sensitivity label to documents containing PHI.
Why it's wrong here
Incorrect: The label must exist and be published before it can be used in an auto-labeling policy.
✗
Enable auditing in Microsoft Purview by turning on Audit logging.
Why it's wrong here
Incorrect: Audit is already enabled by default for organizations with appropriate licenses. It can be verified later, but not the first step.
✓
Create a sensitivity label named 'Highly Confidential - PHI' with encryption and header, and publish it to users and groups.
Why this is correct
Correct: The label must be created and published before it can be applied automatically.
Clue confirmation
The clue words "first", "minimum / minimize" in the question point toward this answer.
Related concept
Read the scenario before looking for a memorised answer.
✗
Create a retention label and policy to retain documents containing PHI for 7 years.
Why it's wrong here
Incorrect: Retention is a separate requirement; the first step is to create the sensitivity label.

Common exam traps

Common exam trap: answer the scenario, not the keyword

Many certification questions include familiar terms but test a specific constraint. Read the exact wording before choosing an answer that is generally true but wrong for this case.

Detailed technical explanation

How to think about this question

This question should be treated as a scenario, not a definition check. Identify the problem, the constraint and the best action. Then compare each option against those facts.

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.
Use explanations to understand the rule behind the answer.

TExam Day Tips

Underline the problem statement mentally.
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 media company stores terabytes of video archives that are accessed once a year for audit purposes. Moving these objects to a cold storage tier (Azure Archive, S3 Glacier, or Google Nearline) costs a fraction of hot storage. Questions like this test whether you understand storage tiers, access frequency tradeoffs, and retrieval latency requirements.

What to study next

Got this wrong? Here's your next step.

Identify which SC-900 exam domain this question belongs to, then review the specific concept being tested. Practise related questions in that domain and focus on understanding why each wrong answer is tempting — not just why the correct answer is right.

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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: Create a sensitivity label named 'Highly Confidential - PHI' with encryption and header, and publish it to users and groups. — The first step is to create the sensitivity label with the required encryption and header settings and publish it so that it can be used in auto-labeling policies. Auto-labeling policies can then be configured to apply the label based on sensitive info types, with user override. Retention labels and policies are separate and can be configured later. Audit is enabled by default but should be verified. Therefore, option C is the correct first action.

What should I do if I get this SC-900 question wrong?

Are there clue words in this question I should notice?

Yes — watch for: "first", "minimum / minimize". Order matters here. You are being tested on which action comes before the others — not which action is generally useful.

What is the key concept behind this question?

Read the scenario before looking for a memorised answer.

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