The answer is to create an auto-labeling policy for sensitivity labels. This is correct because Microsoft Purview’s auto-labeling policies can scan documents in SharePoint Online for sensitive information types—such as social security numbers—and automatically apply the appropriate sensitivity label without user intervention. On the SC-900 exam, this question tests your understanding of how auto-labeling differs from other Purview features: retention labels manage data lifecycle, DLP policies block sharing but don’t apply labels, and data classification dashboards only provide visibility. A common trap is confusing auto-labeling with manual labeling or DLP, so remember that auto-labeling is the only option that both detects sensitive data and applies a label automatically. Memory tip: “Auto-labeling = automatic classification; DLP = automatic protection.”
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.
Your organization uses Microsoft Purview to manage data classification. You need to ensure that sensitive data containing social security numbers is automatically labeled when stored in SharePoint Online. What should you configure?
Answer the question above first, then reveal the full breakdown to understand why each option is right or wrong.
Correct answer & explanation
✓
Create an auto-labeling policy for sensitivity labels
Option A is correct because auto-labeling policies in Microsoft Purview can automatically apply sensitivity labels to documents containing sensitive information types such as social security numbers. Option B is wrong because retention labels are for retention, not classification. Option C is wrong because DLP policies detect and prevent sharing but do not apply labels automatically. Option D is wrong because data classification dashboards provide visibility but do not apply labels.
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.
✗
Use the data classification dashboard in Microsoft Purview
Why it's wrong here
The dashboard provides insights but does not automatically apply labels.
✗
Create a retention label policy
Why it's wrong here
Retention labels manage retention, not classification.
✗
Configure a data loss prevention (DLP) policy
Why it's wrong here
DLP policies detect and block sharing but do not apply labels.
✓
Create an auto-labeling policy for sensitivity labels
Why this is correct
Auto-labeling policies automatically apply sensitivity labels based on sensitive info types.
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: Create an auto-labeling policy for sensitivity labels — Option A is correct because auto-labeling policies in Microsoft Purview can automatically apply sensitivity labels to documents containing sensitive information types such as social security numbers. Option B is wrong because retention labels are for retention, not classification. Option C is wrong because DLP policies detect and prevent sharing but do not apply labels automatically. Option D is wrong because data classification dashboards provide visibility but do not apply labels.
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.
About these practice questions
Courseiva creates original exam-style practice questions with explanations and wrong-answer analysis. It does not publish real exam questions, exam dumps, or protected exam content. Learn why practice questions differ from exam dumps →
These questions test the same concept from different angles. Work through them to make sure you can recognise it however the exam phrases it.
Variation 1. Refer to the exhibit. You are reviewing a Microsoft Purview classification rule. The rule is enabled and set to apply a sensitivity label. However, you notice that documents containing EU personal data are not being labeled automatically. What is the most likely cause?
hard
A.The label ID is invalid
✓ B.The rule does not include a condition to detect sensitive data
C.The rule status is Disabled
D.The rule is not scoped to SharePoint Online
Why B: Option C is correct because a classification rule requires a condition (such as a sensitive information type) to detect content. The exhibit shows no condition, so the rule will not trigger. Option A is wrong because the rule status is Enabled, not Disabled. Option B is wrong because the label ID is present. Option D is wrong because there is no indication of a scope issue.
Variation 2. Your organization uses Microsoft Purview to classify data. You need to automatically apply a 'Confidential' label to documents that contain salary information. Which type of sensitivity label configuration should you use?
medium
A.Manual labeling
✓ B.Auto-labeling with sensitive information types
C.Default labeling for SharePoint libraries
D.Mandatory labeling policy
Why B: Option B is correct because auto-labeling rules can automatically apply labels based on sensitive information types. Option A is wrong because manual labeling requires user action. Option C is wrong because default labeling applies to new documents but not based on content. Option D is wrong because mandatory labeling requires users to label but does not auto-apply.
Variation 3. Your organization uses Microsoft 365 and wants to classify and protect documents based on their content, such as credit card numbers. Which Microsoft Purview feature automatically classifies content based on sensitive information types?
easy
A.Data Loss Prevention policy
✓ B.Auto-labeling with sensitivity labels
C.Unified labeling client
D.eDiscovery
Why B: Auto-labeling policies in Microsoft Purview can automatically apply sensitivity labels based on sensitive information types like credit card numbers. Option A is correct. Unified labeling is the client, not automatic. DLP blocks sharing. eDiscovery searches.
Last reviewed: Jun 21, 2026
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