- A
Manual sensitivity labeling
Why wrong: Manual labeling requires user action, not automatic.
- B
Data Loss Prevention (DLP) policies
Why wrong: DLP policies block sharing but do not apply labels.
- C
Auto-labeling policies
Auto-labeling policies automatically apply labels based on conditions.
- D
Communication Compliance policies
Why wrong: Communication Compliance monitors communications, not document labeling.
Question 1,049 of 1,411
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. Read the scenario carefully and evaluate each option against the stated constraints before committing to an answer. 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.
An organization needs to automatically apply a 'Highly Confidential' sensitivity label to all documents that contain a specific custom sensitive information type. The label should be applied when the document is created or modified. Which feature of Microsoft Purview Information Protection should be used?
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
✓
Auto-labeling policies
Auto-labeling policies in Microsoft Purview Information Protection are designed to automatically apply sensitivity labels to documents and emails based on conditions such as the presence of sensitive information types. This feature supports both simulation and real-time enforcement, and it can be triggered when documents are created or modified, meeting the organization's requirement exactly.
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.
- ✗
Manual sensitivity labeling
Why it's wrong here
Manual labeling requires user action, not automatic.
- ✗
Data Loss Prevention (DLP) policies
Why it's wrong here
DLP policies block sharing but do not apply labels.
- ✓
Auto-labeling policies
Why this is correct
Auto-labeling policies automatically apply labels based on conditions.
Related concept
Read the scenario before looking for a memorised answer.
- ✗
Communication Compliance policies
Why it's wrong here
Communication Compliance monitors communications, not document labeling.
Common exam traps
Common exam trap: answer the scenario, not the keyword
The trap here is that candidates often confuse auto-labeling policies with DLP policies, mistakenly thinking DLP can apply labels, when in fact DLP only monitors and protects data in transit or at rest without modifying the label itself.
Detailed technical explanation
How to think about this question
Auto-labeling policies use the Microsoft 365 unified labeling client and can be configured with conditions such as custom sensitive information types defined via the Microsoft Purview Compliance Portal or PowerShell. The policy can be set to run in simulation mode first to test impact before enforcement, and it leverages the same classification engine used by DLP and other Purview solutions. A real-world scenario is automatically labeling financial documents containing custom credit card patterns without user intervention, ensuring compliance with PCI DSS.
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
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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: Auto-labeling policies — Auto-labeling policies in Microsoft Purview Information Protection are designed to automatically apply sensitivity labels to documents and emails based on conditions such as the presence of sensitive information types. This feature supports both simulation and real-time enforcement, and it can be triggered when documents are created or modified, meeting the organization's requirement exactly.
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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Last reviewed: Jul 4, 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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