The answer is to combine sensitivity labels with encryption and Data Loss Prevention (DLP). Sensitivity labels allow you to apply encryption directly to financial reports, ensuring only authorized users can read them, while a DLP policy can be configured to block forwarding actions, such as emailing the report externally or sharing it via unapproved channels. On the SC-900 exam, this scenario tests your understanding of how Microsoft Purview’s information protection and governance features work together—a common trap is confusing DLP with retention or eDiscovery, which handle storage or discovery, not real-time forwarding prevention. Remember that encryption locks the content, and DLP locks the action; think of it as “label to lock, DLP to block.”
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. The scenario asks you to isolate a root cause — eliminate options that address a different problem before choosing. 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.
Your organization must ensure that financial reports are protected with encryption and cannot be forwarded. Which two Microsoft Purview features should you combine?
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 encryption and Data Loss Prevention
Option D is correct because sensitivity labels can apply encryption, and DLP can block forwarding. Option A is wrong because retention policies do not encrypt or block forwarding. Option B is wrong because eDiscovery and Audit are for discovery and logging. Option C is wrong because Information Barriers restrict communication but not forwarding. Option E is wrong because Data Lifecycle Management manages retention, not forwarding.
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 Lifecycle Management and Data Loss Prevention
Why it's wrong here
Data Lifecycle Management handles retention and deletion, not encryption.
✗
Retention policies and Records Management
Why it's wrong here
These manage retention and disposition, not encryption or forwarding.
✗
Information Barriers and Communication Compliance
Why it's wrong here
Information Barriers restrict communication between groups; Communication Compliance monitors communications.
✗
eDiscovery (Premium) and Audit (Standard)
Why it's wrong here
These are for discovery and auditing, not protection.
✓
Sensitivity labels with encryption and Data Loss Prevention
Why this is correct
Sensitivity labels encrypt the document; DLP can block forwarding.
Related concept
Read the scenario before looking for a memorised answer.
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 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.
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.
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 encryption and Data Loss Prevention — Option D is correct because sensitivity labels can apply encryption, and DLP can block forwarding. Option A is wrong because retention policies do not encrypt or block forwarding. Option B is wrong because eDiscovery and Audit are for discovery and logging. Option C is wrong because Information Barriers restrict communication but not forwarding. Option E is wrong because Data Lifecycle Management manages retention, not forwarding.
What should I do if I get this SC-900 question wrong?
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.
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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