SC-900 Practice Question: Describe the capabilities of Microsoft compliance solutions
Your organization must ensure that financial reports are protected with encryption and cannot be forwarded. Which two Microsoft Purview features should you combine?
⚠ Common exam trap
Many candidates think DLP alone can prevent forwarding, but without encryption (via sensitivity labels), the content remains unprotected if forwarded outside the organization, so both features must be combined.
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
✓
Sensitivity labels with encryption and Data Loss Prevention
Sensitivity labels with encryption allow you to apply persistent encryption to financial reports, ensuring they remain protected even when shared. Data Loss Prevention (DLP) policies can then block or warn users from forwarding these encrypted reports via email or other channels, providing a combined solution for encryption and forwarding prevention.
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 (DLM) focuses on managing the retention, deletion, and archiving of data throughout its lifecycle, ensuring compliance with data governance policies. While Data Loss Prevention (DLP) can indeed prevent unauthorized sharing or forwarding of sensitive content, DLM itself does not provide encryption capabilities for documents. Therefore, this combination fails to meet the requirement for encrypting financial reports directly.
- ✗
Retention policies and Records Management
Why it's wrong here
Retention policies are designed to specify how long data should be kept and when it should be deleted, aligning with regulatory and organizational requirements. Records Management extends this by ensuring that critical records are immutable and properly disposed of. Neither of these features, however, offers direct encryption for documents or provides mechanisms to actively block the forwarding of sensitive information. Their primary role is data governance over time, not real-time content protection.
- ✗
Information Barriers and Communication Compliance
Why it's wrong here
Information Barriers are used to restrict communication and collaboration between specific user groups within an organization, often for regulatory compliance like preventing insider trading. Communication Compliance monitors communications for policy violations, such as harassment or inappropriate content. While both are crucial for compliance, neither directly encrypts documents to protect their content nor prevents the forwarding of a document itself; they focus on communication channels and content monitoring within those channels.
- ✗
eDiscovery (Premium) and Audit (Standard)
Why it's wrong here
eDiscovery (Premium) is a set of tools used to identify, preserve, collect, process, and review electronic data for legal or investigative purposes. Audit (Standard) provides logs of user and administrator activities across Microsoft 365 services for security and compliance monitoring. Both are primarily reactive tools for investigation and compliance verification *after* an event has occurred, rather than proactive mechanisms for encrypting documents or preventing their unauthorized forwarding in real-time.
- ✓
Sensitivity labels with encryption and Data Loss Prevention
Why this is correct
Sensitivity labels allow organizations to classify and protect sensitive content by applying persistent encryption, visual markings, and access restrictions directly to documents and emails. This ensures the financial reports are encrypted regardless of where they are stored or shared. Data Loss Prevention (DLP) policies then complement this by detecting sensitive information and actively preventing its unauthorized forwarding or sharing based on predefined rules, thus providing comprehensive protection.
Go deeper
Related to this question
Learn chapter
Microsoft Entra ID
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.
Key term
DLP
Data Loss Prevention — security technology that detects and prevents unauthorised transmission of sensitive data outside an organisation.
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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.