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Question 121:

A Microsoft 365 administrator wants to implement a solution that ensures that when an employee leaves the company, their user account and associated data are automatically managed according to corporate policies. The administrator needs to disable the account, retain necessary content for legal or regulatory purposes, and allow the manager to access the mailbox if required. Which solution should the administrator implement?

A) Microsoft 365 retention and inactive mailbox policies
B) Conditional Access policies
C) SharePoint Online external sharing restrictions
D) Microsoft Endpoint Manager device compliance policies

Answer:

A) Microsoft 365 retention and inactive mailbox policies

Explanation:

Microsoft 365 retention and inactive mailbox policies provide organizations with the capability to manage user accounts and data lifecycle in a secure and compliant manner. In this scenario, the organization wants to ensure that when an employee leaves, their account is properly disabled, critical content is preserved for legal or regulatory reasons, and relevant data remains accessible to managers or legal personnel as needed. By implementing retention policies for Exchange Online mailboxes, SharePoint Online, and OneDrive for Business, administrators can enforce rules that automatically retain data for specified periods, ensuring compliance with corporate governance and regulatory requirements.

Inactive mailbox policies are particularly useful for scenarios where a user account is disabled but the organization needs to maintain access to mailbox content for legal, operational, or regulatory purposes. When a user leaves, administrators can convert the mailbox into an inactive state, which ensures that no one can sign in while preserving all messages, calendar items, contacts, and tasks. The mailbox remains searchable for compliance or eDiscovery purposes, allowing managers, legal teams, or compliance officers to access critical information without exposing the account to misuse. Retention policies can also be configured to automatically delete data after a defined period, reducing storage costs while ensuring that only necessary content is retained.

This approach allows for centralized and automated management of departing employees’ accounts. It reduces the risk of accidental data loss, prevents unauthorized access, and ensures that compliance and auditing requirements are met. Retention and inactive mailbox policies integrate seamlessly with Microsoft Purview Compliance tools, enabling administrators to perform content searches, generate reports, and manage holds for regulatory investigations or legal requirements. The policies can be applied consistently across Exchange Online, SharePoint Online, OneDrive for Business, and Teams, providing comprehensive lifecycle management for all relevant data associated with the employee.

Conditional Access policies, while useful for controlling access based on device compliance, risk, or location, do not handle account deactivation or content retention for departing employees. SharePoint Online external sharing restrictions limit external collaboration but do not manage account or mailbox lifecycle. Microsoft Endpoint Manager compliance policies enforce device security but do not control mailbox or data retention for inactive users.

Implementing retention and inactive mailbox policies ensures that when an employee leaves, organizational data is protected, legal and compliance requirements are maintained, and managers or relevant personnel retain access to information needed for ongoing business operations. This approach provides a structured, auditable, and automated process for handling user departures, aligning with best practices in identity and data lifecycle management in Microsoft 365. Administrators can also configure alerts and auditing to track when accounts are disabled, when retention policies are applied, and when content is accessed, ensuring complete transparency and accountability.

Question 122:

A Microsoft 365 administrator wants to monitor and prevent risky sign-in activities across the organization. The organization requires that users with high-risk sign-ins are prompted for additional verification or blocked, while low-risk users experience minimal disruption. Which solution should the administrator implement?

A) Azure AD Identity Protection with risk-based Conditional Access policies
B) Exchange Online transport rules
C) SharePoint Online site-level permissions
D) Microsoft Endpoint Manager compliance policies

Answer:

A) Azure AD Identity Protection with risk-based Conditional Access policies

Explanation:

Azure Active Directory Identity Protection is a comprehensive tool designed to detect, investigate, and respond to risky sign-ins and compromised accounts in real-time. In this scenario, the organization wants to monitor user activity, evaluate risk levels for sign-ins, and enforce adaptive policies that provide additional verification or block access for high-risk scenarios. Risk-based Conditional Access policies enable administrators to apply access controls dynamically based on detected risks, such as unfamiliar locations, impossible travel scenarios, leaked credentials, or atypical sign-in patterns.

Identity Protection continuously monitors authentication events and assigns a risk level for each sign-in, which Conditional Access policies can then act upon. High-risk sign-ins can be blocked entirely or require multi-factor authentication, providing a security layer that mitigates potential account compromise. Low-risk sign-ins, such as those from familiar locations or compliant devices, are allowed without additional prompts, maintaining a seamless user experience. This approach ensures that organizational security is strengthened without introducing unnecessary friction for legitimate users.

Administrators can configure policies to target specific users, groups, or applications, allowing for flexible risk management tailored to business requirements. For example, highly sensitive accounts, such as finance or executive staff, can have stricter policies, requiring MFA even for medium-risk sign-ins. Reports and dashboards in Azure AD Identity Protection provide detailed insights into risky sign-ins, risky users, and policy effectiveness, allowing administrators to refine configurations and respond proactively to potential threats.

Other solutions do not provide equivalent capabilities. Exchange Online transport rules are limited to controlling email flow and content, without evaluating user sign-in risk. SharePoint Online site-level permissions control content access but do not monitor or respond to risk-based sign-in behavior. Microsoft Endpoint Manager enforces device compliance but does not dynamically assess sign-in risk or apply adaptive access policies based on user behavior.

Using Azure AD Identity Protection combined with risk-based Conditional Access policies also aligns with regulatory and industry standards for identity security. Organizations can demonstrate due diligence by implementing proactive measures that detect and respond to suspicious activities, protecting sensitive data and reducing the likelihood of breaches. It also supports continuous monitoring and automatic policy enforcement, helping IT teams focus on strategic tasks rather than manual risk assessment. By implementing this solution, organizations achieve a balance between security and usability, ensuring that risky sign-ins are appropriately mitigated while allowing legitimate users to access resources efficiently.

Question 123:

A Microsoft 365 administrator is tasked with implementing external collaboration controls. The organization wants to allow guest access to Teams and SharePoint sites only for specific partners and to monitor all guest activities for security and compliance purposes. Which solution should the administrator implement?

A) Azure AD B2B collaboration with conditional access and auditing policies
B) Microsoft Endpoint Manager device compliance policies
C) Exchange Online transport rules
D) Microsoft Purview sensitivity labels

Answer:

A) Azure AD B2B collaboration with conditional access and auditing policies

Explanation:

Azure Active Directory Business-to-Business (B2B) collaboration provides organizations with a secure and controlled method for enabling external users to access Microsoft 365 resources. In this scenario, the organization needs to allow only specific partners to access Teams and SharePoint sites while monitoring their activity to maintain security and compliance. By implementing Azure AD B2B collaboration, administrators can invite external users to participate in the organization’s tenant, assign them to appropriate groups, and grant access to selected resources without creating full internal accounts.

Conditional Access policies can be applied to guest accounts to enforce access controls based on device compliance, location, or risk level. This ensures that external users can only access resources from trusted devices or locations, mitigating the risk of unauthorized access or data leakage. Administrators can also configure session controls through Microsoft Cloud App Security to limit activities such as file download, copy, or sharing for guests, providing further protection for sensitive content. Auditing policies track guest user activity across Teams, SharePoint Online, and OneDrive, enabling compliance reporting, anomaly detection, and proactive risk management.

Other solutions are insufficient for managing external collaboration. Microsoft Endpoint Manager manages internal device compliance but does not control guest access or external collaboration. Exchange Online transport rules only affect email flow and do not govern Teams or SharePoint access. Microsoft Purview sensitivity labels protect content by applying classification and encryption, but they do not control which external users can access resources or monitor their activity in real-time.

Implementing Azure AD B2B collaboration ensures that external users are granted least-privilege access, reducing exposure to sensitive organizational data. Administrators can configure access expiration policies for guests, require multi-factor authentication for added security, and monitor usage patterns to detect abnormal behavior. Integration with Microsoft 365 auditing and reporting capabilities allows the organization to maintain compliance with regulatory standards, demonstrate due diligence, and ensure that external collaboration is managed in a secure, scalable, and auditable manner. By leveraging Azure AD B2B, conditional access, and auditing policies, administrators achieve secure collaboration that balances productivity with robust security controls, ensuring that sensitive data is only accessible to authorized external partners.

Question 124:

A Microsoft 365 administrator needs to ensure that users can securely collaborate on documents in SharePoint Online and OneDrive for Business while preventing accidental data leaks. The organization wants to classify documents based on sensitivity, apply encryption automatically, and restrict access when sharing externally. Which solution should the administrator implement?

A) Microsoft Purview sensitivity labels with automatic encryption and access control
B) Exchange Online transport rules
C) Azure AD Conditional Access policies
D) Microsoft Endpoint Manager compliance policies

Answer:

A) Microsoft Purview sensitivity labels with automatic encryption and access control

Explanation:

Microsoft Purview sensitivity labels provide a powerful mechanism to protect sensitive content across Microsoft 365 applications, including SharePoint Online, OneDrive for Business, Teams, and Office apps. In this scenario, the organization needs to ensure that sensitive documents are classified, encrypted automatically, and shared only with authorized users, including preventing accidental leaks to external parties. Sensitivity labels enable administrators to create categories such as “Confidential,” “Highly Confidential,” or “Internal Use Only,” and assign specific protection actions for each label.

Automatic encryption is applied to documents and emails labeled as sensitive, ensuring that only authorized users can open or modify the content. Encryption is persistent, meaning that protection travels with the file, even if it is downloaded, shared internally, or sent externally to an approved partner. Administrators can also configure access restrictions, such as limiting editing, copying, or printing for external recipients. These measures provide strong protection for intellectual property, financial data, and regulatory information, helping organizations maintain compliance with data protection regulations such as GDPR, HIPAA, or financial standards.

Sensitivity labels can be applied manually by users or automatically based on content analysis using predefined conditions and keywords. For example, documents containing credit card numbers, financial account information, or personally identifiable information (PII) can be automatically labeled and encrypted without user intervention. Administrators can configure exceptions, allowing authorized external partners to access specific content while maintaining strict access controls. This approach reduces the risk of accidental data exposure, improves compliance reporting, and enhances user awareness of organizational data handling policies.

Other solutions do not address the full set of requirements in this scenario. Exchange Online transport rules primarily govern email flow and message content within Exchange mailboxes but do not enforce document-level classification or encryption in SharePoint and OneDrive. Azure AD Conditional Access policies control access based on device compliance, location, and sign-in risk but do not classify content or automatically apply encryption. Microsoft Endpoint Manager compliance policies enforce device security but cannot classify or encrypt individual documents.

Using Microsoft Purview sensitivity labels also enables comprehensive auditing and reporting. Administrators can monitor how sensitive content is shared, who has accessed documents, and whether any attempts to bypass policies have occurred. Integration with Microsoft Cloud App Security further enhances protection by providing real-time monitoring of risky user behavior, alerting administrators to unusual download or sharing activity. Sensitivity labels create a structured framework for protecting sensitive documents, ensuring that organizational data remains secure while enabling collaboration within controlled boundaries. This solution aligns with best practices for information governance, providing a scalable, automated, and auditable method to secure sensitive content in a cloud-first environment.

Question 125:

A Microsoft 365 administrator wants to enforce device compliance requirements for users accessing corporate resources. The organization requires that only devices that meet security policies, such as encryption, antivirus, and OS version, can access Exchange Online, SharePoint Online, and Teams. Which solution should the administrator implement?

A) Azure AD Conditional Access policies with device compliance integration
B) Microsoft Purview Data Loss Prevention policies
C) Exchange Online mailbox retention policies
D) SharePoint Online external sharing policies

Answer:

A) Azure AD Conditional Access policies with device compliance integration

Explanation:

Azure Active Directory Conditional Access policies integrated with device compliance checks provide a comprehensive method for enforcing security policies on devices accessing Microsoft 365 resources. In this scenario, the organization wants to ensure that only devices meeting security requirements, such as encryption, antivirus status, and approved operating system versions, can access Exchange Online, SharePoint Online, and Teams. Device compliance is evaluated through Microsoft Endpoint Manager, which assesses each device against organizational security standards and reports the compliance status to Azure AD. Conditional Access policies use this information in real-time to grant, block, or challenge access to Microsoft 365 applications based on the device’s compliance state.

By implementing Conditional Access policies with device compliance integration, administrators can enforce security standards without disrupting legitimate access. Devices that fail to meet compliance requirements can be blocked from accessing resources, prompted for additional authentication, or required to remediate the non-compliance before access is granted. This ensures that corporate data remains protected from unauthorized access, malware, or compromised devices. Policies can be applied selectively to specific user groups, applications, or organizational units, providing flexibility and targeted enforcement.

Microsoft Purview Data Loss Prevention (DLP) policies, while effective for detecting and preventing accidental sharing of sensitive content, do not enforce device-level compliance requirements. Exchange Online mailbox retention policies are designed to manage email retention and compliance but do not evaluate device security. SharePoint Online external sharing policies control who can access content externally but cannot assess whether a device meets security standards.

Conditional Access policies with device compliance integration also support reporting, monitoring, and adaptive access. Administrators can track which devices are compliant, review access logs, and identify users attempting to access resources from non-compliant devices. Integration with Azure AD Identity Protection further enables dynamic risk assessment, allowing access decisions to consider both user behavior and device security. Temporary exceptions can be configured for contractors or partners, allowing access from managed devices while enforcing restrictions for high-risk users.

This approach aligns with Microsoft 365 security best practices and regulatory requirements. It reduces the likelihood of unauthorized data exposure, enforces organizational compliance policies consistently, and enhances overall security posture. By combining device compliance evaluation with Conditional Access, organizations can protect corporate resources, maintain user productivity, and ensure that only trusted, secure devices are used to access sensitive information across Microsoft 365 applications.

Question 126:

A Microsoft 365 administrator is responsible for securing email communication in Exchange Online. The organization requires automatic encryption of emails containing sensitive financial data, prevention of accidental sharing, and alerts when users attempt to send confidential information externally. Which solution should the administrator implement?

A) Microsoft Purview Data Loss Prevention policies with encryption and alerting
B) Azure AD Conditional Access policies
C) SharePoint Online sensitivity labels
D) Microsoft Endpoint Manager device compliance policies

Answer:

A) Microsoft Purview Data Loss Prevention policies with encryption and alerting

Explanation:

Microsoft Purview Data Loss Prevention (DLP) policies in Exchange Online allow administrators to automatically detect, classify, and protect sensitive email content. In this scenario, the organization requires automatic encryption of emails containing sensitive financial data, prevention of accidental external sharing, and alerts when users attempt to send confidential information. DLP policies are designed to scan email messages in real-time, identify sensitive information using predefined patterns or custom rules, and enforce protective actions such as encryption, notification, or blocking message delivery.

By configuring DLP policies, administrators can specify conditions for sensitive data, such as credit card numbers, bank account information, or other financial identifiers, and apply automated actions when these conditions are met. Encryption ensures that only authorized recipients can access the content, preventing accidental exposure to unauthorized parties. Policy tips can notify users before sending, educating them about potential violations and reducing the risk of accidental data leaks. Alerts generated by DLP policies provide administrators with actionable insights, allowing them to monitor policy compliance, investigate risky behavior, and respond to incidents in a timely manner.

Other solutions do not meet the full requirements of this scenario. Azure AD Conditional Access policies control access based on user identity, device compliance, location, and risk but do not inspect email content or enforce encryption. SharePoint Online sensitivity labels protect content stored in SharePoint and OneDrive but do not apply directly to email messages. Microsoft Endpoint Manager enforces device compliance and security policies but does not control email content or detect sensitive data.

Implementing DLP policies with encryption and alerting ensures that financial data is automatically protected, even if users attempt to share it externally. Administrators can also configure policies to work across multiple Microsoft 365 services, including Teams, OneDrive, and SharePoint, providing consistent protection for sensitive content across the organization. Detailed reporting, audit logs, and compliance dashboards allow IT teams to track policy enforcement, identify potential gaps, and demonstrate adherence to regulatory requirements. This solution provides an automated, scalable, and effective approach to securing email communication, reducing the risk of data breaches, and ensuring that sensitive financial information is handled securely within Microsoft 365.

Question 127:

A Microsoft 365 administrator needs to configure self-service password reset (SSPR) for all employees. The organization wants to allow users to reset their passwords securely without contacting the help desk while ensuring that MFA is required during the reset process. Which solution should the administrator implement?

A) Azure AD self-service password reset with multi-factor authentication
B) Exchange Online mailbox retention policies
C) Microsoft Endpoint Manager compliance policies
D) SharePoint Online sensitivity labels

Answer:

A) Azure AD self-service password reset with multi-factor authentication

Explanation:

Azure Active Directory self-service password reset (SSPR) is designed to empower users to reset or unlock their passwords independently while maintaining strong security controls. In this scenario, the organization requires a secure method for employees to reset their passwords without relying on IT support, combined with the enforcement of multi-factor authentication (MFA) during the process. By implementing Azure AD SSPR with MFA, users are prompted to verify their identity using additional authentication methods, such as a phone number, email, or authenticator app, before completing the reset. This approach significantly reduces help desk workload, improves user experience, and ensures that only authorized users can perform password resets.

SSPR integrates seamlessly with Azure AD’s authentication and identity management infrastructure. Administrators can configure policies to require verification through multiple methods, such as answering security questions, receiving an SMS code, or approving a request via Microsoft Authenticator. Policies can also be applied selectively to specific groups, such as executives, IT staff, or external users, providing flexibility in enforcing security levels. Azure AD generates detailed audit logs for all password reset activities, allowing administrators to monitor usage, detect anomalies, and ensure compliance with organizational security requirements.

Other solutions do not meet the requirements for secure self-service password reset. Exchange Online mailbox retention policies manage email retention and compliance but do not provide capabilities for password management. Microsoft Endpoint Manager compliance policies enforce device security configurations but are not involved in user authentication or password reset workflows. SharePoint Online sensitivity labels protect content but do not address identity or password management functions.

Implementing SSPR with MFA ensures that the organization maintains high security standards while reducing operational overhead. Users can reset passwords even from remote locations or during off-hours, minimizing downtime and improving productivity. Administrators can configure conditional policies to require stronger authentication for high-risk users or scenarios, such as when a reset attempt occurs from an unfamiliar location or device. Integration with Azure AD Identity Protection allows for additional monitoring of risky accounts, enabling the organization to respond proactively to potential threats.

By enabling SSPR, organizations can also improve overall compliance and meet regulatory requirements for identity management and authentication. Users remain empowered to manage their accounts securely, help desk resources are freed for more strategic tasks, and the risk of unauthorized access due to compromised credentials is significantly reduced. The solution provides a scalable, flexible, and secure framework for managing password resets in a modern cloud environment, ensuring operational efficiency and strong security practices across Microsoft 365.

Question 128:

A Microsoft 365 administrator needs to implement policies that protect sensitive documents in SharePoint Online and OneDrive for Business while allowing collaboration with external partners under strict conditions. The organization requires automated classification, encryption, and access restriction based on document content. Which solution should the administrator implement?

A) Microsoft Purview sensitivity labels with automatic classification and protection
B) Azure AD Conditional Access policies
C) Exchange Online transport rules
D) Microsoft Endpoint Manager compliance policies

Answer:

A) Microsoft Purview sensitivity labels with automatic classification and protection

Explanation:

Microsoft Purview sensitivity labels provide an enterprise-grade solution for classifying, protecting, and controlling access to sensitive content across Microsoft 365 applications, including SharePoint Online and OneDrive for Business. In this scenario, the organization wants to automatically detect sensitive information in documents, apply encryption, and restrict access, while still enabling controlled collaboration with external partners. Sensitivity labels can be configured to automatically identify content based on predefined sensitive information types, such as financial data, personal identifiers, or intellectual property, and enforce protection actions without requiring user intervention.

Automatic classification ensures consistent application of security policies across all content. When a document meets the criteria defined in a sensitivity label, the label can automatically apply encryption, access restrictions, and usage limitations such as preventing copy, download, or print actions. This prevents accidental or unauthorized disclosure of sensitive information while enabling secure collaboration within approved boundaries. Sensitivity labels can also integrate with Azure AD B2B collaboration to allow external partners to access labeled content under strict conditions, such as requiring MFA or limiting sharing capabilities.

Other solutions do not provide the comprehensive capabilities required in this scenario. Azure AD Conditional Access policies control access based on user identity, device compliance, or location but do not inspect content or enforce document-level protection. Exchange Online transport rules apply only to email content and do not protect SharePoint or OneDrive documents. Microsoft Endpoint Manager compliance policies ensure device security but cannot classify or encrypt files.

Implementing sensitivity labels also enables advanced reporting and auditing. Administrators can track which documents are labeled, how they are shared, and any attempts to bypass policies. Integration with Microsoft Cloud App Security provides additional monitoring, alerting, and automated response capabilities for sensitive content accessed by external users. Organizations can also configure retention and disposition policies to ensure content lifecycle management, maintaining compliance with regulatory or corporate data governance requirements.

Sensitivity labels create a secure collaboration environment, where sensitive content is protected throughout its lifecycle, whether accessed internally or externally. By automating classification, encryption, and access controls, organizations reduce the risk of human error, enforce consistent policies, and enhance visibility into how sensitive documents are shared and used. This approach aligns with Microsoft 365 best practices for information governance, data protection, and secure collaboration in hybrid work environments. It ensures that sensitive documents are adequately protected while enabling productivity and collaboration across the organization and with approved partners.

Question 129:

A Microsoft 365 administrator wants to monitor and protect the organization from data exfiltration attempts via email, OneDrive, and Teams. The organization requires real-time alerts when sensitive information is shared externally and automatic enforcement actions, such as blocking or encrypting content. Which solution should the administrator implement?

A) Microsoft Purview Data Loss Prevention policies with real-time alerting and protection
B) Azure AD Conditional Access policies
C) SharePoint Online site-level permissions
D) Microsoft Endpoint Manager compliance policies

Answer:

A) Microsoft Purview Data Loss Prevention policies with real-time alerting and protection

Explanation:

Microsoft Purview Data Loss Prevention (DLP) policies are designed to detect, monitor, and protect sensitive information across Microsoft 365 services, including Exchange Online, OneDrive, SharePoint Online, and Teams. In this scenario, the organization wants to proactively prevent data exfiltration, generate real-time alerts, and enforce protective actions such as blocking access, encrypting content, or notifying administrators and users. DLP policies allow administrators to define sensitive information types, create conditions and rules for detecting that information, and configure automated actions when violations occur.

Real-time enforcement ensures that sensitive information is protected at the moment it is shared. For example, if a user attempts to email a document containing financial account information to an external recipient, the DLP policy can automatically block the email, encrypt the attachment, or notify the administrator. Similarly, sharing of sensitive files through OneDrive or Teams can be restricted to authorized users, and alerts can be generated for monitoring purposes. DLP policies also allow administrators to configure user notifications, providing education and awareness about organizational data handling policies, reducing accidental leaks.

Other solutions are insufficient for addressing real-time data exfiltration protection. Azure AD Conditional Access policies focus on controlling access based on user identity, device compliance, or location but do not inspect or act upon content. SharePoint Online site-level permissions control access to content but do not provide automated content detection, encryption, or alerting. Microsoft Endpoint Manager compliance policies enforce device security but cannot detect or act upon sensitive data in real-time.

DLP policies also integrate with advanced auditing and reporting tools, allowing administrators to analyze patterns of policy violations, identify high-risk users, and refine protective measures over time. They support a wide range of sensitive information types, including custom identifiers, and provide flexible rules for actions such as encryption, blocking, or quarantine. This ensures consistent enforcement across all Microsoft 365 workloads, helping organizations maintain compliance with regulatory requirements and internal security standards. Implementing DLP policies creates a proactive, automated, and scalable approach to safeguarding sensitive data, reducing the risk of accidental or malicious exfiltration while maintaining productivity and collaboration across the organization.

Question 130:

A Microsoft 365 administrator needs to implement a solution that allows users to securely collaborate using Microsoft Teams while ensuring that sensitive content is protected. The organization wants to prevent external users from downloading confidential files and enforce encryption on all shared documents. Which solution should the administrator implement?

A) Microsoft Purview sensitivity labels with Teams integration and encryption policies
B) Azure AD Conditional Access policies
C) Exchange Online transport rules
D) Microsoft Endpoint Manager compliance policies

Answer:

A) Microsoft Purview sensitivity labels with Teams integration and encryption policies

Explanation:

Microsoft Purview sensitivity labels integrated with Teams provide a comprehensive solution for protecting sensitive content while enabling secure collaboration. Sensitivity labels classify and protect data based on organizational policies, and they can be applied automatically or manually across Microsoft Teams, SharePoint Online, and OneDrive for Business. In this scenario, the organization wants to prevent external users from downloading confidential files and enforce encryption on all shared documents within Teams. Sensitivity labels allow administrators to apply encryption to files shared in channels, chats, and Teams meetings, ensuring that only authorized users can access content.

Automatic enforcement can be configured to detect sensitive information such as financial records, personally identifiable information, or intellectual property. When a file meets the criteria defined in a sensitivity label, encryption is applied automatically, restricting access to only users with appropriate permissions. External users invited as guests in Teams can have limited access based on their identity and group membership, ensuring that confidential documents cannot be downloaded or copied without proper authorization.

Other solutions do not fully meet the requirements of this scenario. Azure AD Conditional Access policies control access based on device compliance, location, and user risk but do not enforce content-level encryption or restrict file downloads. Exchange Online transport rules protect email content but do not extend to Teams files or chats. Microsoft Endpoint Manager enforces device security and compliance but cannot apply encryption policies directly to shared content in Teams.

Sensitivity labels also provide audit and reporting capabilities, allowing administrators to monitor how content is shared, accessed, and protected. They integrate with Microsoft Cloud App Security to provide real-time monitoring and policy enforcement for risky activities, such as attempting to share protected files externally. By implementing sensitivity labels with Teams integration, organizations ensure that collaboration is secure, content protection policies are consistently applied, and sensitive information remains protected throughout its lifecycle. This approach supports compliance with regulatory standards and reduces the risk of data leakage while maintaining user productivity and seamless collaboration in Microsoft Teams.

Question 131:

A Microsoft 365 administrator is tasked with ensuring that users can access corporate resources only from managed and secure devices. The organization wants to enforce access restrictions based on device compliance status, operating system version, and antivirus configuration. Which solution should the administrator implement?

A) Azure AD Conditional Access policies with device compliance evaluation
B) Microsoft Purview Data Loss Prevention policies
C) Exchange Online mailbox retention policies
D) SharePoint Online site-level permissions

Answer:

A) Azure AD Conditional Access policies with device compliance evaluation

Explanation:

Azure Active Directory Conditional Access policies with device compliance evaluation provide a robust solution for ensuring that only secure and compliant devices can access Microsoft 365 resources. In this scenario, the organization wants to enforce restrictions based on device compliance, operating system version, and antivirus configuration. Conditional Access policies evaluate real-time signals from devices managed through Microsoft Endpoint Manager, including compliance status, configuration, and security posture. If a device fails to meet the defined compliance requirements, access to Exchange Online, SharePoint Online, Teams, or other Microsoft 365 services can be blocked, challenged with additional authentication, or limited based on risk.

Device compliance evaluation is crucial for organizations that must adhere to regulatory standards or protect sensitive data. Endpoint Manager ensures that devices meet security baselines, have encryption enabled, are running supported operating systems, and have antivirus and endpoint protection software up-to-date. Conditional Access policies use this information dynamically to enforce security decisions at the point of access. This approach reduces the likelihood of data breaches, ensures consistent enforcement of security policies, and provides administrators with detailed audit logs for monitoring and reporting purposes.

Other solutions do not address device compliance requirements comprehensively. Microsoft Purview DLP policies detect and protect sensitive data but do not enforce device-level access restrictions. Exchange Online mailbox retention policies manage email data lifecycle but do not assess device security. SharePoint Online site-level permissions control access to content but do not evaluate device compliance or apply conditional restrictions based on device security posture.

By implementing Conditional Access policies with device compliance evaluation, organizations achieve a layered security approach that combines identity-based access control with device security. Administrators can create policies that differentiate between internal employees, contractors, and external users, applying stricter controls where necessary. Temporary access can be granted to specific users or groups under defined conditions, ensuring flexibility while maintaining strong security controls. Integration with reporting and monitoring tools enables IT teams to detect risky sign-ins, track device compliance trends, and take proactive measures to remediate non-compliant devices. This solution provides a scalable, automated, and auditable method for protecting corporate resources and ensures that only trusted devices are used to access sensitive organizational data across Microsoft 365.

Question 132:

A Microsoft 365 administrator wants to configure email protection to detect and block phishing attacks and malicious content for all users. The organization requires automated scanning of inbound and outbound emails, real-time threat detection, and alerts to administrators when suspicious activity is detected. Which solution should the administrator implement?

A) Microsoft Defender for Office 365 with anti-phishing and safe attachments policies
B) Azure AD Conditional Access policies
C) Microsoft Endpoint Manager compliance policies
D) SharePoint Online sensitivity labels

Answer:

A) Microsoft Defender for Office 365 with anti-phishing and safe attachments policies

Explanation:

Microsoft Defender for Office 365 provides comprehensive email security by detecting, blocking, and mitigating phishing attacks, malware, and other malicious content. In this scenario, the organization wants to protect users from inbound and outbound threats, implement real-time detection, and generate alerts for administrators when suspicious activity occurs. Defender for Office 365 scans all emails and attachments, using advanced machine learning models, heuristics, and known threat intelligence to identify malicious content. Policies such as anti-phishing, anti-spam, and safe attachments can be configured to automatically quarantine suspicious emails, block unsafe links, or alert users and administrators of potential threats.

Anti-phishing policies detect attempts to impersonate internal users, external contacts, or well-known brands and automatically apply mitigation actions, such as blocking the message, applying quarantine, or instructing users on safe practices. Safe attachments policies open email attachments in a secure sandbox environment, detecting malicious content before delivering the email to the user. Threat intelligence integration provides real-time analysis and reporting of attack patterns, enabling administrators to respond to emerging threats proactively.

Other solutions do not provide equivalent email threat protection. Azure AD Conditional Access policies control access to resources based on identity and device signals but do not inspect or mitigate malicious email content. Microsoft Endpoint Manager ensures device compliance but does not provide email security capabilities. SharePoint Online sensitivity labels protect content within SharePoint and OneDrive but do not address phishing or malware in emails.

By implementing Defender for Office 365 with anti-phishing and safe attachments policies, administrators can provide an automated, scalable, and real-time solution for protecting the organization from email-based threats. Alerts and reporting dashboards allow IT teams to track attack attempts, user interactions with suspicious emails, and policy enforcement results. Integration with Microsoft 365 security and compliance tools allows for coordinated response to incidents, including threat investigation, user education, and remediation. Defender for Office 365 helps organizations maintain a secure communication environment, minimize risk from phishing and malware attacks, and ensure that sensitive information remains protected while maintaining user productivity.

Question 133:

A Microsoft 365 administrator is responsible for implementing compliance solutions to ensure that sensitive data is protected across the organization. The organization requires automatic detection of sensitive content in emails and documents, the ability to prevent sharing outside the organization, and detailed reports for auditing purposes. Which solution should the administrator implement?

A) Microsoft Purview Data Loss Prevention policies
B) Azure AD Conditional Access policies
C) Microsoft Endpoint Manager compliance policies
D) Exchange Online mailbox retention policies

Answer:

A) Microsoft Purview Data Loss Prevention policies

Explanation:

Microsoft Purview Data Loss Prevention (DLP) policies provide organizations with the ability to detect, monitor, and prevent the accidental or intentional sharing of sensitive information across Microsoft 365 workloads. In this scenario, the organization needs automatic detection of sensitive content in both emails and documents, enforcement actions to prevent external sharing, and reporting capabilities for auditing purposes. DLP policies achieve these requirements by scanning data in Exchange Online, SharePoint Online, OneDrive for Business, and Microsoft Teams, identifying sensitive information types such as credit card numbers, social security numbers, health records, or financial data.

When sensitive content is detected, DLP policies can enforce a variety of actions. Administrators can block sharing with external users, restrict access, apply encryption, or notify both the user and IT staff. These actions ensure that sensitive information remains within the organization and reduces the risk of data breaches. Policy tips can inform users about potential violations, educating them on compliance best practices and helping prevent accidental data leaks. This approach ensures a balance between security and user productivity, as users are guided on proper data handling rather than facing abrupt access denials without explanation.

Detailed audit and reporting features allow IT teams to monitor policy effectiveness, review incidents where sensitive content was blocked or restricted, and demonstrate compliance with regulatory standards such as GDPR, HIPAA, or financial regulations. Administrators can customize DLP policies with specific conditions and rules to reflect organizational requirements, including defining sensitive information types unique to the business, setting thresholds for enforcement, and specifying exceptions for authorized business scenarios.

Other solutions in this scenario are less effective. Azure AD Conditional Access policies primarily control access to resources based on identity, device compliance, and risk but do not detect or protect sensitive content. Microsoft Endpoint Manager compliance policies enforce device security configurations but cannot inspect content or enforce organizational data protection rules. Exchange Online mailbox retention policies manage email lifecycle and archival but do not prevent sensitive content from being shared externally or provide detailed auditing for compliance purposes.

Implementing Microsoft Purview DLP policies ensures that sensitive data is automatically detected, appropriate protective actions are enforced, and detailed reports are available for auditing and compliance. This solution integrates seamlessly with the Microsoft 365 compliance ecosystem, supporting content discovery, monitoring, and protection across email, file storage, and collaboration platforms. It also allows administrators to fine-tune policies for different departments, business units, or user groups, ensuring that compliance measures are applied consistently while accommodating organizational workflows. By using DLP policies, organizations can proactively reduce the risk of data leaks, maintain regulatory compliance, and educate users on best practices for data security, achieving a robust and scalable approach to protecting sensitive information across Microsoft 365 environments.

Question 134:

A Microsoft 365 administrator needs to configure multi-factor authentication (MFA) for all users. The organization requires that users are prompted for additional verification during sign-in, with support for both app-based authentication and SMS codes. Which solution should the administrator implement?

A) Azure AD multi-factor authentication
B) Exchange Online transport rules
C) Microsoft Purview sensitivity labels
D) SharePoint Online site permissions

Answer:

A) Azure AD multi-factor authentication

Explanation:

Azure Active Directory (Azure AD) multi-factor authentication (MFA) is a security mechanism that strengthens the protection of user accounts by requiring an additional form of verification beyond the standard password. In this scenario, the organization wants all users to be prompted for additional verification during sign-in, supporting app-based authentication (such as Microsoft Authenticator) and SMS codes. MFA significantly reduces the likelihood of account compromise from password theft, phishing attacks, or other unauthorized access attempts by introducing a second verification factor.

Administrators can enable MFA at a per-user level or implement Conditional Access policies to enforce MFA based on risk assessment, device compliance, location, or application sensitivity. Users authenticate with a primary method, typically their password, and then complete a secondary verification step. This can include a notification to an authenticator app, a one-time passcode via SMS, or phone call verification. The flexibility of supporting multiple verification methods ensures user accessibility while maintaining strong security.

Integration with Conditional Access policies allows MFA to be applied dynamically, providing stronger enforcement for high-risk scenarios such as sign-ins from unfamiliar locations, new devices, or accounts flagged by Azure AD Identity Protection as potentially compromised. Administrators can also configure trusted IP ranges and device compliance rules to reduce unnecessary prompts for low-risk sign-ins while ensuring that high-risk access attempts are challenged appropriately.

Other solutions in this scenario are insufficient for implementing MFA. Exchange Online transport rules control email message flow but do not enforce authentication requirements. Microsoft Purview sensitivity labels classify and protect documents but do not manage user authentication. SharePoint Online site permissions control access to content but do not provide multi-factor verification for sign-ins.

Implementing Azure AD MFA enhances organizational security by providing an additional verification layer for all user accounts. It integrates with Microsoft 365 applications, third-party SaaS services, and on-premises applications through Azure AD Application Proxy. Administrators gain reporting and monitoring capabilities to track MFA enrollment, user authentication attempts, and potentially risky activities. MFA implementation also aligns with compliance and regulatory requirements, helping organizations meet security standards and demonstrate due diligence in protecting user identities and sensitive information. By deploying MFA effectively, organizations reduce the likelihood of unauthorized access, protect corporate data, and maintain user productivity through secure yet user-friendly authentication mechanisms.

Question 135:

A Microsoft 365 administrator needs to ensure that employees’ accounts are automatically disabled and data is retained when they leave the organization. The administrator wants to preserve access to mailbox content for managers and legal compliance purposes. Which solution should the administrator implement?

A) Microsoft 365 retention policies and inactive mailbox configuration
B) Azure AD Conditional Access policies
C) Microsoft Endpoint Manager device compliance policies
D) SharePoint Online sensitivity labels

Answer:

A) Microsoft 365 retention policies and inactive mailbox configuration

Explanation:

Microsoft 365 retention policies combined with inactive mailbox configuration provide a structured approach for managing the lifecycle of user accounts and associated data when employees leave an organization. In this scenario, the administrator wants to automatically disable accounts while retaining data for managers and legal compliance purposes. Retention policies in Exchange Online, SharePoint Online, and OneDrive for Business allow administrators to define how long content should be retained, ensuring compliance with legal and regulatory requirements.

Inactive mailbox configuration in Exchange Online ensures that when a user account is disabled, the mailbox is preserved in an inactive state. This prevents any login or unauthorized access while keeping the data accessible for legal or compliance purposes. Administrators and authorized personnel can access the content for eDiscovery, auditing, or operational needs without compromising security. Retention policies can be combined with legal holds to ensure that specific content remains preserved beyond standard retention periods if required for investigations or legal proceedings.

Other solutions are insufficient for this requirement. Azure AD Conditional Access policies control access based on risk, device compliance, and location but do not manage the lifecycle of departing employee accounts or preserve mailbox data. Microsoft Endpoint Manager compliance policies enforce device security but cannot retain or preserve user data after account deactivation. SharePoint Online sensitivity labels protect documents but do not manage account lifecycle or mailbox access.

By implementing retention policies and inactive mailbox configuration, organizations ensure that departing employees’ data is properly managed, regulatory and corporate compliance is maintained, and managers or legal teams have access to critical content as needed. Administrators can also configure auditing and reporting to track which accounts have been deactivated, which mailboxes are inactive, and which content has been preserved. This approach reduces risk, maintains data integrity, and ensures a consistent, automated, and auditable process for managing employee departures. Retention policies and inactive mailboxes are essential for organizations that need to comply with legal, financial, or operational requirements while maintaining security and controlling access to sensitive information.