Microsoft SC-300 Microsoft Identity and Access Administrator Exam Practice Test

To allow User1 to purchase a Microsoft Entra Permissions Management license, you need to grant them the permission to perform billing or purchase operations. Microsoft documentation for Microsoft Entra Permissions Management states that to activate a trial or purchase a license, you must have Billing Administrator permissions.

Specifically, under the “Enabling Permissions Management” section, Microsoft says:

“Sign in as a Global Administrator … In the Entra ID portal … select Microsoft Entra Permissions Management, then select the link to purchase a license or begin a trial.”

And in the product roles and permissions documentation, Microsoft lists “Billing Administrator” as a built-in role that performs billing related tasks like managing payment information and also mentions that to activate (i.e. purchase) Permissions Management you require Billing Administrator role.

Assigning Global Administrator (option D) is too broad and would violate principle of least privilege. Permissions Management Administrator allows managing the product after it's enabled, but doesn't grant purchase rights. User Access Administrator is an Azure role that grants permissions to manage role assignments but not purchase licenses. Thus the minimal correct role is Billing Administrator.

Comprehensive and Detailed Explanation: =

According to the Microsoft SC-300: Identity and Access Administrator Study Guide and the official Microsoft Learn documentation on Microsoft Secure Score, only specific roles in Azure AD and Microsoft 365 can view and update Secure Score improvement actions.

The SharePoint Administrator role allows managing SharePoint Online sites, permissions, and sharing policies, but it does not grant access to Microsoft Secure Score functionalities or security-related improvement actions.

Microsoft defines the following roles as being able to update and manage Secure Score:

Global Administrator

Security Administrator

Security Reader (read-only view)

Therefore, assigning the SharePoint Administrator role does not meet the requirement.

The exhibit shows Pass-through authentication (PTA) enabled with two agents and Password Hash Sync (PHS) enabled. SC-300 materials state that when both PTA and PHS are enabled, Azure AD can fall back to password hash verification if PTA agents are unavailable. With connectivity from on-premises to the Internet lost, PTA agents cannot validate passwords; however, PHS continues to allow cloud authentication for synchronized users. Therefore:

• User1 (cloud-only) authenticates in Azure AD directly, unaffected by on-prem connectivity.

• User2 (directory-synced) can still sign in because PHS is enabled and provides backup authentication when PTA is unreachable.

• User3 (guest) authenticates in the home tenant, which is independent of your on-prem connectivity; the host tenant simply relies on the external identity.

SC-300 explicitly teaches that enabling PHS alongside PTA provides resiliency for sign-in and is a recommended best practice. Consequently, all three users can sign in under the described outage.

SC-300 materials describe FIDO2 security keys as a passwordless method that works well for shared workstations and environments where phones are not permitted. The documentation explains that “FIDO2 security keys are phishing-resistant, standards-based credentials that allow users to sign in with a portable hardware device” and that “the user performs a gesture on the key (PIN or biometrics) to complete authentication.” It further clarifies that “Azure AD passwordless methods (FIDO2 security keys, Windows Hello for Business, Authenticator) satisfy strong authentication requirements and can meet MFA prompts.” Because the call-center computers don’t have biometrics and phones are prohibited, Authenticator and Windows Hello for Business are unsuitable. A named network location does not provide MFA by itself. By issuing FIDO2 keys (tokens) to agents, you meet the MFA requirement with a factor the user has (the key) plus a secure local gesture (PIN), which SC-300 documents as accepted for Azure AD strong/MFA.

This scenario involves Admin Consent Requests in Azure AD. When users try to use apps that require admin consent, requests are sent to designated reviewers who can approve or deny them.

Admin1: Cloud Application Administrator — can review and approve admin consent requests.

Admin2: Application Administrator — can review and approve admin consent requests.

Admin3: Security Administrator — cannot approve app consent requests because this role does not have application management privileges.

User1: No role assigned — can be listed as a reviewer but cannot approve, only receive notifications.

From Microsoft Documentation:

“Only users with sufficient permissions, such as the Application Administrator or Cloud Application Administrator roles, can grant admin consent in response to consent requests.”

Therefore, only Admin1 and Admin2 meet the requirement to review and approve.

According to the Microsoft SC-300: Microsoft Identity and Access Administrator Study Guide and Microsoft Learn module “Plan and implement Conditional Access policies”, enabling or customizing Conditional Access policies requires that Security Defaults in Azure AD be disabled.

Security defaults provide a basic level of protection, such as enforcing MFA for all users and blocking legacy authentication. However, when Security Defaults are enabled, custom Conditional Access policies cannot be created because both features manage sign-in risk and access control.

From the Microsoft documentation:

“To use Conditional Access policies, you must disable security defaults. Conditional Access policies provide more granularity and flexibility than security defaults.”

Therefore, before you can control access to Microsoft 365 resources through Conditional Access, the first step is to disable Security Defaults in the Azure AD tenant.

The AWS connector in Microsoft Defender for Cloud Apps is designed to integrate activity logs, user authentication data, and app permissions granted through OAuth. This connector enables monitoring of OAuth token use, identity federation events, and cross-service authentication.

From the official Microsoft Learn content:

“When the AWS app connector is added, Defender for Cloud Apps collects OAuth activity and permissions information to detect anomalous behavior or excessive app permissions.”

This fulfills the requirement to monitor OAuth authentication requests from AWS and its associated accounts. Therefore, adding the AWS app connector meets the goal.

In Microsoft Entra ID (Azure AD), Security Defaults is a built-in baseline security configuration that enforces basic identity protection, such as requiring all users to register for multi-factor authentication (MFA) using the Microsoft Authenticator app. When security defaults are enabled, users cannot select alternate MFA methods (like SMS or phone call).

According to the Microsoft SC-300 Official Study Guide and Azure AD Identity Protection documentation, only administrators with elevated security roles—specifically the Security Administrator, Global Administrator, or Conditional Access Administrator—can enable or disable security defaults.

Here’s the detailed reasoning:

User1 (Security Administrator): This role can manage identity security settings, including modifying MFA configurations and security defaults.

User2 (Privileged Authentication Administrator): This role can reset MFA details for other users but cannot modify tenant-wide MFA or security default settings.

User3 (Service Support Administrator): This role is limited to viewing service health and support tickets and has no permissions to modify security configurations.

Since User2 is restricted by security defaults (which enforce Microsoft Authenticator only), the only way to allow alternative MFA methods is to disable or customize security defaults. That configuration must be done by User1 (Security Administrator).

Microsoft Documentation: “To enable or disable security defaults, you must be a Global Administrator, Security Administrator, or Conditional Access Administrator.”

According to the Microsoft SC-300: Identity and Access Administrator Study Guide and the Microsoft Learn module “Implement and manage synchronization with Microsoft Entra Connect”, when Microsoft Entra Connect synchronizes user objects between on-premises Active Directory (AD) and Microsoft Entra ID (formerly Azure AD), each user must have unique proxyAddresses attributes across the directory.

The proxyAddresses attribute represents all the email aliases (SMTP addresses) associated with a user. The synchronization process verifies these values to ensure they are not duplicated among multiple user objects. If two or more objects in AD share the same SMTP address, the synchronization process generates an error, typically reported as a “Duplicate Attribute” conflict.

In the provided scenario:

User1 (proxyAddresses: user1@contoso.com, sales@contoso.com)

User2 (proxyAddresses: user2@contoso.com, user.2@contoso.com, service@contoso.com)

User3 (proxyAddresses: user3@contoso.com, sales@contoso.com)

After updating the proxy addresses:

User1 → admin@contoso.com

User2 → sales@contoso.com

Because sales@contoso.com is now used by both User2 and User3, the sync process detects a duplicate SMTP address. This causes synchronization errors for User2 and User1 if any other duplicates exist.

User3, with unique attributes, synchronizes successfully.

The SC-300 reference under “Manage synchronization errors using Microsoft Entra Connect Health” confirms:

“If two or more objects contain the same value for attributes marked as unique (such as proxyAddresses or userPrincipalName), Microsoft Entra Connect synchronization fails for those objects until the conflict is resolved.”

According to the Microsoft SC-300 Study Guide and Microsoft Learn module: “Manage Microsoft 365 group lifecycles”, group expiration policies in Microsoft Entra ID apply only to Microsoft 365 groups (formerly Office 365 groups).

Group expiration is part of lifecycle management for Microsoft 365 services and helps ensure that unused groups are automatically deleted after a defined period unless renewed by the owner.

From the table:

Group1 (Security) → Cannot be set to expire.

Group2 (Microsoft 365) → Can be set to expire.

Group3 (Mail-enabled security) → Cannot be set to expire.

Group4 (Distribution) → Cannot be set to expire.

Therefore, Group2 only can have an expiration policy applied.

Regarding group lifetime, the Exam Ref SC-300 and Microsoft documentation confirm that the minimum (shortest) group lifetime that can be configured for Microsoft 365 group expiration policies is 30 days.

Microsoft Learn states:

“The group lifetime can be set to 30, 60, 90, 180, or 365 days. The minimum allowed is 30 days.”

This ensures group owners have sufficient time to renew or manage expiring groups before automatic deletion.

According to the Microsoft SC-300 Study Guide and Microsoft Learn module “Implement Azure AD Connect for Hybrid Identity”, to ensure high availability and quick failover for Azure AD Connect, the recommended method is to deploy a second Azure AD Connect server in staging mode.

Here’s how it works step by step:

Install Azure AD Connect on Server2Begin by installing Azure AD Connect on the secondary server (Server2) while keeping the primary server (Server1) active. This ensures the configuration and synchronization schema match between both servers.

Configure Server2 in Staging ModeDuring installation, enable Staging Mode.In this mode, Server2 imports data from on-premises Active Directory and Azure AD but does not export or synchronize changes. It maintains a fully up-to-date synchronization database, ready to take over if the primary server fails.Microsoft Documentation states:

“When staging mode is enabled, Azure AD Connect performs imports and synchronizations but disables exports. This keeps the staging server up to date without affecting production.”

Run Export for all connectors on Server1Ensure Server1 (the active Azure AD Connect server) completes all export operations to keep Azure AD and on-premises AD fully synchronized. This step ensures no pending changes are lost before failover.

✅ Failover process:

If Server1 fails, simply disable staging mode on Server2 (which makes it active) — failover occurs immediately with minimal downtime since synchronization data is already current.

In Conditional Access (CA), assignments determine who the policy applies to using Include and Exclude lists. A user targeted by Include but present in Exclude is not affected. CA evaluates all applicable policies for a sign-in. If any applicable policy has Block access, the sign-in is denied, even when other policies would grant access. When policies Grant access with conditions, the user must meet the configured controls (for example, Require device to be marked as compliant) to succeed.

Applying these rules: Policy1 includes Group1 and excludes Group3, targets All resources, and Blocks access. Group1 contains User1 and User3; Group3 contains User1. Therefore, User1 is excluded from Policy1 and not blocked, but User3 remains included and is blocked from all resources. Policy2 includes Group2, targets App1, and Grants access requiring a compliant device. Group2 contains User2 and User3; all devices (Device1–Device3) are Compliant. Thus, User2 can access App1 from Device2 because Policy2 is satisfied and no block applies. User1 is not in Group2 and not blocked by Policy1, so access to App1 from Device1 is allowed. User3, however, is affected by Policy1 (Block); block overrides any grant in Policy2, so User3 cannot sign in to App1 from Device3.

The SC-300 official study guide and Microsoft Learn: Manage Access Reviews confirm that Access Reviews in Azure AD can target user-based groups, Azure AD roles, and enterprise applications. However, dynamic device groups are not supported for access reviews.

Object type: An administrative unit

Role: Authentication administrator

In Azure AD Identity and Access Administration, Administrative units (AUs) let you scope delegated admin privileges to a subset of users. The study materials describe AUs as a way to “delegate administration to a subset of users by using administrative units,” ensuring the support team’s privileges apply only to the executives and not tenant-wide. You would place the 100 executives in a dedicated AU and then assign the support team a suitable role scoped to that AU, satisfying least-privilege principles.

For the required tasks—reset passwords and manage MFA settings—the correct least-privileged role is Authentication administrator. The role capabilities are documented as allowing you to “view, set, and reset authentication method information for non-administrators” and to “require users to re-register for MFA,” which covers managing MFA settings for the executives. By contrast, Password administrator is limited to “reset passwords for non-administrators” and does not include managing authentication methods/MFA, and Helpdesk administrator focuses on basic user help tasks and password resets without full MFA method management. Therefore, assigning Authentication administrator scoped to an Administrative unit containing only the executives meets the scenario and adheres to least privilege.

In Azure AD Monitoring and Reporting documentation and the SC-300 Study Guide (Module: Monitor and report on identity and access), sign-in logs in Azure Active Directory are retained for a default duration of 14 days.

The sign-in logs contain information about user sign-in activity, including application usage, conditional access policies, and multi-factor authentication details. These logs are accessible through the Azure portal → Azure Active Directory → Sign-ins, or programmatically via Microsoft Graph.

Microsoft specifies:

“Azure AD stores sign-in activity for 14 days by default. For longer retention, you must integrate with Azure Monitor (Log Analytics), Azure Storage, or Event Hub.”

This 14-day retention limit applies to tenants without additional premium log retention solutions.

According to the Microsoft SC-300: Identity and Access Administrator Study Guide and Microsoft Learn documentation under “Manage Administrative Units in Azure Active Directory”, Administrative Units (AUs) provide a way to delegate administrative permissions over subsets of Azure AD resources — such as specific users or groups — without granting directory-wide privileges.

Department1 Administrative Unit contains User1, User2, Group1, and Group2.

Admin1 is assigned the User Administrator role scoped to Department1 AU.

Admin2 is assigned the User Administrator role scoped to the entire directory.

User3 and User4 are not members of Department1 AU — they belong only to Group2, but group membership does not automatically bring those users under AU scope.

Admin1’s permissions are limited strictly to users and groups within the Department1 AU.✅ Conclusion: Admin1 cannot reset the passwords of User3 and User4.Answer: No

Both User1 and Group2 are in the Department1 AU, but in Azure AD, the User Administrator role scoped to an AU cannot manage group memberships unless explicitly delegated with Group Administrator privileges or unless the AU is configured to allow it.

The User Administrator role allows password reset and user management, not group membership management.✅ Conclusion: Admin1 cannot add User1 to Group2.Answer: No

Admin2 has the User Administrator role assigned at the directory level, meaning global scope.

Therefore, Admin2 can manage user credentials, including password resets, for all users in the tenant — including User1.✅ Conclusion: Admin2 can reset the password of User1.Answer: Yes

Supporting Reference (Microsoft Learn):

“Administrative units restrict scope for delegated administrators. A User Administrator scoped to an AU can reset passwords only for users in that AU. A User Administrator assigned at the directory level can reset passwords for any user.”

No

Yes

Yes

In Microsoft Entra/Azure RBAC, permissions are granted by role + scope and inherit down the hierarchy (subscription → resource group → resource). The SC-300 materials clarify that the Reader role is “a management-plane role that permits viewing resources but not modifying them or accessing data contents.” Therefore, although Group1 has Reader at Sub1, User1 (Group1, Group2) cannot read Key Vault secrets in Vault1 because Reader does not grant data-plane access. The study guide also notes for Azure Key Vault with RBAC: “Key Vault Secrets User can read secret contents (get/list) for vaults in the assigned scope.” Since Group2 holds Key Vault Secrets User at RG2, any member of Group2 (including User2) can read secrets in Vault2 (which is in RG2). However, that assignment does not extend to RG1, so it doesn’t help User1 with Vault1. Finally, SC-300 coverage of built-in roles states: “Owner grants full access to all resources within the scope, including the ability to modify settings and delegate access.” Because Group3 is Owner at RG1, User3 can manage resources in RG1, including updating the configuration of VM1 located there.

Result: User1 → No, User2 → Yes, User3 → Yes.

According to the Microsoft Identity and Access Administrator (SC-300) Official Study Guide and Microsoft Learn: “Azure AD Identity Protection – User Risk Policies and Remediation”, Azure AD Identity Protection provides mechanisms to automatically or manually remediate risky user accounts based on detected user risk levels (low, medium, high).

The scenario states:

A User risk policy (Risk1) exists that requires users with a high severity risk to reset their password upon next sign-in.

User1 has triggered a medium severity alert, not high.

The goal is to force User1 to reset his password on the next sign-in, with minimal administrative effort.

A. Configure a sign-in risk policy:This policy targets sign-in risks (suspicious sign-ins), not user risks, and would not directly force a password reset — it only enforces MFA or blocks access.

B. Mark User1 as compromised: ✅When an administrator marks a user as compromised in Azure AD Identity Protection, it immediately elevates the user’s risk level to “high.”Since the existing User risk policy (Risk1) automatically forces password reset for high-risk users, User1 will be required to change his password the next time he signs in — satisfying the requirement automatically.This approach uses the existing configuration, meeting the “minimize administrative effort” criterion.

C. Reconfigure the user risk policy to trigger on medium or low severity:This would affect all users globally, not just User1, which is not minimal effort and could increase false positives.

D. Reset the Azure MFA registration for User1:This affects MFA credentials, not password resets, and doesn’t remediate risk.

From Microsoft’s documentation:

“Marking a user as compromised increases their risk level to High, triggering any configured user risk policy to require password reset upon next sign-in.”

Therefore, the most efficient and compliant action according to Microsoft’s SC-300 study materials is to mark User1 as compromised.

The Microsoft SC-300 Exam Ref and Microsoft Learn module: “Manage administrative units” specify that administrative units (AUs) are used to delegate administrative permissions over subsets of users or groups within an Entra tenant.

In this scenario, the goal is to allow User1 to manage only the users in the marketing department. The correct approach is to create an administrative unit (AU) for the marketing department and then assign User1 an appropriate role (for example, User Administrator) scoped to that AU.

Microsoft 365 groups, management groups, and resource groups serve different purposes:

Microsoft 365 groups are for collaboration.

Management groups organize Azure subscriptions.

Resource groups group Azure resources.

Only administrative units in Entra ID provide delegated role-based administration for user subsets.

When granting external users (such as contractors) access to Microsoft Entra resources like enterprise applications, the correct method is to invite them as guest users.

The Microsoft SC-300 Study Guide states:

“To collaborate with external users who authenticate using their existing accounts (e.g., Outlook.com, Gmail, or another Entra tenant), you must invite them as guest users using the Microsoft Graph API or the New-MgInvitation PowerShell cmdlet.”

In this scenario, the contractor uses user1@outlook.com, which is a personal Microsoft account. The New-MgInvitation cmdlet creates a guest user in the tenant that links to their external identity for authentication.

According to the Microsoft SC-300: Identity and Access Administrator Study Guide and Microsoft Learn modules “Implement and manage Azure AD roles” and “Implement Privileged Identity Management (PIM)”, there is a clear distinction between Azure AD built-in roles and Azure (resource-based) built-in roles.

Azure AD built-in roles govern directory-level access — such as managing users, groups, enterprise apps, or security settings in Azure Active Directory (Entra ID).The Privileged Role Administrator role allows the user to manage role assignments for directory roles in Azure AD, including activating roles through PIM.The Global Administrator also has this capability, but the Privileged Role Administrator is the least privilege role that meets the delegation requirement — aligning with the principle of least privilege stated in the scenario.As the documentation notes:

“Privileged Role Administrator manages role assignments in Azure AD, including the ability to activate and assign roles through Azure AD Privileged Identity Management.”

Azure built-in roles, on the other hand, are used to control access at the Azure resource level — for subscriptions, resource groups, and individual resources.The role responsible for managing these assignments is the User Access Administrator.This role can grant or revoke access to Azure resources by managing role assignments within Azure RBAC (Role-Based Access Control).The Microsoft documentation states:

“User Access Administrator allows management of user access to Azure resources. It can assign roles in Azure RBAC for resources, subscriptions, and management groups.”

Therefore:

✅ To manage Azure AD built-in role assignments → Privileged role administrator

✅ To manage Azure built-in role assignments → User access administrator

This approach satisfies the delegation requirement mentioned in the scenario by assigning the least-privileged roles necessary for each type of role management task.

In SC-300, Azure AD Identity Protection is the prescribed control to “automatically detect and remediate externally leaked credentials.” That specific user risk—Leaked credentials—relies on Microsoft comparing known breached username/password pairs with what Azure AD can evaluate. The study materials explain that Identity Protection “detects leaked credentials when Microsoft finds a match with the user’s current credentials,” and also note that password hash synchronization (PHS) can be enabled even if your sign-in method is Pass-through Authentication or federation. A common exam call-out is that without PHS, Azure AD has no hash to compare, so the leaked-credential signal is unavailable. Enabling PHS (you can keep PTA as the active sign-in method) allows Identity Protection to raise user risk and enforce policy actions such as require password change or block access. By contrast, Azure AD Password Protection addresses banned/weak passwords at change time, not breached-credential telemetry; federation choices (e.g., PingFederate) don’t deliver the leaked-credential signal; and authentication method policy controls how users perform MFA (e.g., methods) rather than whether leaked credentials are detected. Therefore, to meet the requirement to “automatically detect and remediate externally leaked credentials,” the minimum correct step is to enable password hash synchronization while retaining PTA—exactly as recommended in SC-300 guidance.

SC-300 emphasizes using Conditional Access with named locations to scope MFA—especially to exclude trusted corporate egress IPs. The materials state that administrators can define named locations by public IP ranges and “mark them as trusted” for policy exceptions. This aligns with the requirement: enforce MFA for all users, but exempt users authenticating from the Boston office. Because Azure AD evaluates the client’s public egress address, private RFC1918 ranges are never seen by Azure AD on the internet, so defining private IP ranges would not work. Likewise, the legacy “Trusted IPs” setting belongs to the old per-user MFA service settings; SC-300 guidance prefers Conditional Access named locations for modern MFA deployments and for combining with other conditions (apps, platforms, user risk, locations). Implementing the Boston office as a named location using its public egress IP range(s), and marking it trusted, lets you exclude that location from the tenant-wide MFA policy while still meeting the broader requirement to enforce MFA for everyone else and for on-prem apps published via Azure AD Application Proxy. In short: define Boston’s public IP as a named location and use it in your Conditional Access policy exclusion to satisfy the exemption precisely and securely.

According to the Microsoft Identity and Access Administrator (SC-300) Exam Ref and the Azure AD Dynamic Membership Rules documentation, when you create a dynamic group in Azure Active Directory (now Entra ID), you define rules that automatically add or remove users based on their attributes.

The scenario requires a group named LWGroup1 that contains all Azure AD user accounts for Litware but excludes all guest accounts. In Azure AD, internal users created within the tenant are designated with the attribute user.userType = "Member", while external or guest accounts from partner organizations have user.userType = "Guest".

To ensure only internal (Litware) users are included, the membership rule must:

Ensure the user object exists — by checking (user.objectId -ne null) which confirms that the rule only applies to valid user objects.

Include only members, excluding guests — by filtering with (user.userType -eq "Member").

Hence, the dynamic rule that satisfies these conditions is:

(user.objectId -ne null) and (user.userType -eq "Member")

This rule guarantees that LWGroup1 dynamically includes all internal users from litware.com and excludes all external users or guest accounts (such as Fabrikam users).

This logic aligns precisely with the Microsoft Learn module “Manage groups in Azure Active Directory” and SC-300 study guide section “Implement and manage dynamic membership rules”, which states:

“Use user.userType to distinguish between internal members and external guests when configuring membership rules for dynamic groups.”

✅ Correct Answer:

(user.objectId -ne null) and (user.userType -eq "Member")

SC-300 materials stress that to enforce modern controls (like MFA) on on-premises apps, you must front them with Azure AD so Conditional Access can evaluate sign-ins. The documentation states that Azure AD Application Proxy “provides secure remote access to on-premises applications” and that apps published through it can have “Conditional Access policies, including multifactor authentication” applied at sign-in. In other words, once the legacy app is published by Application Proxy, Azure AD sits in the path, enabling you to meet the requirement to enforce MFA when accessing on-premises applications and to combine it with your location-based exemptions.

For SharePoint Online restrictions, SC-300 points to Microsoft Cloud App Security (Defender for Cloud Apps) for real-time governance: you can create session policies that “control and limit activities in real time” and, for SharePoint Online and other Microsoft 365 apps, “monitor user sessions and block download, cut, copy, and print” when conditions (device state, risk, or location) warrant it. Since the scenario already has anomaly detections enabled, configuring Cloud App Security policies aligns directly with the requirement to place access restrictions on SharePoint Online without altering tenant-wide consent settings. Thus, publish on-prem apps with Application Proxy to bring them under Conditional Access (for MFA), and use Cloud App Security policies to enforce SharePoint Online session and download controls.

According to the Microsoft SC-300: Identity and Access Administrator Study Guide and the Microsoft Learn module “Monitor and respond to Azure AD events with Azure Sentinel”, multi-staged attacks are advanced threat scenarios that require correlation of multiple events — for example, a suspicious sign-in followed by abnormal Office 365 activity.

The scenario in the question states:

“Litware wants to use the Fusion rule in Azure Sentinel to detect multi-staged attacks that include a combination of suspicious Azure AD sign-ins followed by anomalous Microsoft Office 365 activity.”

Azure Sentinel’s Fusion rule is a built-in, machine-learning–driven correlation rule that automatically detects multi-stage attacks by analyzing anomalies across multiple data sources such as Azure AD sign-in logs, Office 365 activity, and security alerts.

However, to fine-tune detection or meet specific organizational monitoring requirements, administrators can customize the rule logic in Sentinel analytics. This allows you to define how different signals and events are correlated, what thresholds trigger an alert, and how Sentinel interprets combined anomalies.

Microsoft documentation states:

“Fusion uses correlation logic in analytics rules to detect complex multi-stage attacks. Administrators can customize rule logic to meet specific detection requirements and fine-tune alert sensitivity.”

The other options do not meet the requirement:

B. Create a workbook → Used for visualization and reporting, not detection.

C. Add data connectors → Used to ingest data sources; this is already configured.

D. Add a playbook → Used for automated response, not for detection logic configuration.

✅ Correct Answer: A. Customize the Azure Sentinel rule logic

Server1

On DC1

Azure AD Password Protection has two components: the DC agent (installed on domain controllers) and the proxy service (installed on one or more member servers). The SC-300 materials and Microsoft Identity Governance guidance explain that the proxy service is required when domain controllers do not have direct internet access. The proxy retrieves the password protection policy and custom banned password list from Azure AD over outbound HTTPS and makes it available to DC agents. The documentation further states that you should deploy at least one proxy per forest and two for high availability, and that domain controllers do not need internet connectivity when a proxy is deployed. In this scenario, DCs are explicitly blocked from internet access, so the proxy must be placed on member servers. Both SERVER1 (Application Proxy connector) and SERVER2 (Azure AD Connect) are domain-joined member servers with internet connectivity and are appropriate locations for the AzureADPasswordProtectionProxy service; selecting both provides the recommended redundancy. The custom banned password list is configured in Azure AD at the tenant level (as part of Azure AD Password Protection settings), not on individual servers. Once configured, the policy and list are downloaded by the proxy and enforced by the DC agent during password set or change operations, satisfying the requirement to implement a banned password list for the litware.com forest.

In the SC-300 coverage of Azure AD Connect and Identity Governance, Microsoft explains that to surface a custom on-premises attribute in Azure AD you must enable Directory extensions in Azure AD Connect. The guide states that “Directory extensions lets you synchronize additional attributes from on-premises Active Directory to Azure AD so they are available in the cloud directory for apps and policy.” This is the supported way to bring a custom attribute (here, LWLicenses) from the litware.com forest into Azure AD so it can be referenced by cloud features such as dynamic group rules. Domain filtering or optional features do not expose a new attribute to Azure AD; directory extensions does.

For license automation, the SC-300 materials on group-based licensing and dynamic groups emphasize that “licenses can be assigned to Azure AD groups; group members then inherit the licenses, and when membership changes, licenses are added or removed automatically.” They further note that “dynamic user groups evaluate rules against user attributes to add or remove users without manual effort,” and that “nested groups are not supported for license inheritance—only direct members receive licenses.” Using the synced LWLicenses attribute in a Dynamic User group rule (for example, user.extensionAttribute… -eq "E5") ensures users are automatically added to the correct group and therefore receive the specified licenses without administrative intervention, fully meeting Litware’s requirement to “manage the assignment of Azure AD licenses by modifying the value of the LWLicenses attribute.”

In Azure AD Identity Governance, application access granted through Entitlement management is organized around catalogs and access packages. The SC-300 study materials explain that “a catalog is a container for resources and access packages” and that you must add your enterprise applications (or the groups tied to those apps) to a catalog before you can build access packages that users can request. Creating the catalog first enables you to place only the required resources in scope and to delegate day-to-day ownership: “catalog owners can manage the resources and access packages within their catalog without being tenant-wide admins,” satisfying the delegation requirement to use custom catalogs and least privilege. After the catalog exists, you create one or more access packages that include the application (or groups) and policies that control who can request, how they are approved, and for how long. Identity Governance then lets you track access package assignments and review who has the app over time. By contrast, programs are used to group and report on governance initiatives (for example, collections of access reviews) rather than to onboard application resources; and modifying user/admin consent settings affects app consent behavior, not the lifecycle tracking of assignments. Therefore, the correct first step to track application access assignments while meeting the delegation requirements is to create a catalog.

To create a group named “Audit” and ensure that its members can activate the Security Reader role, follow these steps:

Open the Microsoft Entra admin center:

Sign in with an account that has the Security Administrator or Global Administrator role.

Navigate to Groups:

Go toTeams & groups>Active teams and groups1.

Create the security group:

Select Add a security group.

On the Set up the basics page, enter “Audit” as the group name.

Add a description if necessary and chooseNext1.

Edit settings:

On theEdit settingspage, select whether you want Microsoft Entra roles to be assignable to this group and selectNext1.

Assign roles:

After creating the group, go to Roles > All roles.

Find and select the Security Reader role.

Under Assignments, choose Assign.

Select the “Audit” group to assign the role to its members2.

Review and finish:

Review the settings to ensure the “Audit” group is created with the ability for its members to activate the Security Reader role.

Finish the setup and save the changes.

By following these steps, you will have created the “Audit” group and enabled its members to activate the Security Reader role, which allows them to view security-related information without having permissions to change it. Remember to communicate the new group and role assignment to the relevant stakeholders in your organization.

To implement a process for reviewing guest users’ access to the Salesforce app with the specified requirements, you can use Microsoft Entra’s Identity Governance access reviews feature. Here’s a step-by-step guide:

Assign the appropriate role:

Ensure you have one of the following roles: Global Administrator, User Administrator, or Identity Governance Administrator1.

Navigate to Identity Governance:

Sign in to the Microsoft Entra admin center.

Go toIdentity governance>Access reviews1.

Create a new access review:

Select New access review.

Choose the Salesforce app to review guest user access1.

Configure the review settings:

Set the frequency of the review to monthly.

Define thedurationof the review period to5 days1.

Determine the reviewers:

Assign the manager of each guest user as the reviewer.

If a guest user does not have a manager, assignMegan Bowenas the reviewer1.

Automate the removal process:

Configure settings toautomatically remove accessif the review is not completed within the specified time frame1.

Monitor and enforce compliance:

Regularly check the access review results to ensure compliance with the review policy1.

Communicate the process:

Inform all stakeholders about the new review process and provide guidance on how to complete the reviews.

By following these steps, you can ensure that guest users’ access to the Salesforce app is reviewed monthly, with managers being responsible for the review, and access is removed if the review is not completed in time.

To add the LinkedIn application as a resource to the Sales and Marketing access package without removing any other resources, you can follow these steps:

Sign in to the Microsoft Entra admin center:

Ensure you have the role of Global Administrator or Identity Governance Administrator.

Navigate to Entitlement Management:

Go to Identity governance > Entitlement management > Access packages1.

Select the Sales and Marketing access package:

Find and select the Sales and Marketing access package to modify it.

Add a new resource:

Within the access package details, select Resources.

Click on + Add resource.

Search for and select the LinkedIn application from the list of available resources.

Configure the resource role:

Assign the appropriate role for the LinkedIn application that users in the Sales and Marketing access package will have.

Review and update the access package:

Ensure that the LinkedIn application has been added as a resource.

Confirm that no other resources have been removed from the access package.

Save the changes:

After reviewing, save the changes to the access package.

Communicate the update:

Notify the relevant users about the addition of the LinkedIn application to their access package.

By following these steps, you will successfully add the LinkedIn application to the Sales and Marketing access package without affecting the other resources.

To configure the account lockout settings so that accounts are locked out for five minutes after 10 failed sign-in attempts, you can follow these steps:

Open the Microsoft Entra admin center:

Sign in with an account that has the Security Administrator or Global Administrator role.

Navigate to the lockout settings:

Go to Security > Authentication methods > Password protection.

Adjust the Smart Lockout settings:

Set the Lockout threshold to 10 failed sign-in attempts.

Set the Lockout duration (in minutes) to 5.

Please note that by default, smart lockout locks an account from sign-in after 10 failed attempts in Azure Public and Microsoft Azure operated by 21Vianet tenants1. The lockout period is one minute at first, and longer in subsequent attempts.However, you can customize these settings tomeet your organization’s requirements if you have Microsoft Entra ID P1 or higher licenses for your users1.

To deploy Multi-Factor Authentication (MFA) for only the members of the Sg-Finance group, excluding Debra Berger, and without using a Conditional Access policy, you can follow these steps:

Open the Microsoft Entra admin center:

Sign in as a Security Administrator or Global Administrator.

Navigate to MFA settings:

Go to Users > Active users.

On the Active users page, select Multi-factor authentication.

Manage user settings:

Find and select the Sg-Finance group.

Enable MFA for this group by setting the requirement status to Enabled.

Exclude a user from MFA:

In the Multi-factor authentication page, search for Debra Berger.

Set her MFA status to Disabled to exclude her from MFA registration.

Verify the configuration:

Ensure that all members of the Sg-Finance group have MFA enabled except for Debra Berger.

Communicate the change:

Inform the Sg-Finance group members about the MFA requirement and provide instructions on how to register for MFA.

Monitor the setup:

Check the sign-in logs to confirm that MFA is being prompted for the Sg-Finance group members and not for Debra Berger.

To ensure that all users can consent to apps that require permission to read their user profile and prevent them from consenting to apps that require any other permissions, you can configure the user consent settings in the Microsoft Entra admin center. Here’s how you can do it:

Sign in as a Global Administrator:

Access the Microsoft Entra admin center with Global Administrator privileges.

Navigate to user consent settings:

Go toIdentity>Applications>Enterprise applications>Consent and permissions>User consent settings1.

Configure the consent settings:

Under User consent for applications, select the option that allows users to consent to apps that only require permission to read their user profile.

Ensure that all other permissions are set to require administrator consent, thus preventing users from consenting to apps that require additional permissions1.

Save the settings:

After configuring the consent settings, select Save to apply the changes.

By following these steps, you will have configured the system to allow user consent for apps that need to read the user profile while blocking consent for apps that require additional permissions. This setup helps maintain user autonomy where appropriate while safeguarding against unauthorized access to broader permissions.

To prevent all users from using legacy authentication protocols when authenticating to Microsoft Entra ID, you can create a Conditional Access policy that blocks legacy authentication. Here’s how to do it:

Sign in to the Microsoft Entra admin center:

Ensure you have the role of Global Administrator or Conditional Access Administrator.

Navigate to Conditional Access:

Go to Security > Conditional Access.

Create a new policy:

Select + New policy.

Give your policy a name that reflects its purpose, like “Block Legacy Auth”.

Set users and groups:

Under Assignments, select Users or workload identities.

Under Include, select All users.

Under Exclude, select Users and groups and choose any accounts that must maintain the ability to use legacy authentication.It’s recommended to exclude at least one account to prevent lockout1.

Target resources:

Under Cloud apps or actions, select All cloud apps.

Set conditions:

Under Conditions > Client apps, set Configure to Yes.

Check only the boxes for Exchange ActiveSync clients and Other clients.

Configure access controls:

Under Access controls > Grant, select Block access.

Enable policy:

Confirm your settings and set Enable policy to Report-only initially to understand the impact.

After confirming the settings using report-only mode, you can move theEnable policytoggle fromReport-onlytoOn2.

By following these steps, you will block legacy authentication protocols for all users, enhancing the security posture of your organization by requiring modern authentication methods. Remember to monitor the impact of this policy and adjust as necessary to ensure business continuity.

To assign a Windows 10/11 Enterprise E3 license to the Sg-Retail group, you can follow these steps:

Sign in to the Microsoft Entra admin center:

Make sure you have the role of Global Administrator or License Administrator.

Navigate to the licensing page:

Go toBilling>Licenses1.

Find the Windows 10/11 Enterprise E3 license:

Look for the Windows 10/11 Enterprise E3 license in the list of available products.

Assign licenses to the group:

Select the license and then choose Assign licenses.

Search for and select the Sg-Retail group.

Confirm the assignment and make sure that the correct number of licenses is available for the group.

Review and confirm the assignment:

Ensure that the licenses have been properly assigned to the Sg-Retail group without affecting other groups or users.

Monitor the license status:

Check the license usage and status to ensure that the Sg-Retail group members can utilize the Windows 10/11 Enterprise E3 features.

By following these steps, the Sg-Retail group should now have the Windows 10/11 Enterprise E3 licenses assigned to them.

To implement additional security checks for the Sg-Executive group members before they canaccess any company apps, you can use Conditional Access policies in Microsoft Entra. Here’s a step-by-step guide:

Sign in to the Microsoft Entra admin center:

Ensure you have the role of Global Administrator or Security Administrator.

Navigate to Conditional Access:

Go to Security > Conditional Access.

Create a new policy:

Select + New policy.

Name the policy appropriately, such as “Sg-Executive Security Checks”.

Assign the policy to the Sg-Executive group:

Under Assignments, select Users and groups.

Choose Select users and groups and then Groups.

Search for and select the Sg-Executive group.

Define the application control conditions:

Under Cloud apps or actions, select All cloud apps to apply the policy to any company app.

Set the device compliance requirement:

Under Conditions > Device state, configure the policy to include devices marked as compliant by Microsoft Intune.

Set the app protection policy requirement:

Under Conditions > Client apps, configure the policy to include client apps that are protected by app protection policies.

Configure the access controls:

Under Access controls > Grant, select Grant access.

Choose Require device to be marked as compliant and Require approved client app.

Ensure that the option Require one of the selected controls is enabled.

Enable the policy:

Set Enable policy to On.

Review and save the policy:

Review all settings to ensure they meet the requirements.

Click Create to save and implement the policy.

By following these steps, you will ensure that the Sg-Executive group members can only access company apps if they meet one of the specified conditions, either by using a compliant device or a protected client app. This enhances the security posture of your organization by enforcing stricter access controls for executive-level users.

To ensure that users in the Sg-Operations group see a tab named “Operations” containing only LinkedIn and Box applications in the My Apps portal, you can create a collection with these specific applications. Here’s how to do it:

Sign in to the Microsoft Entra admin center:

Make sure you have one of the following roles: Global Administrator, Cloud Application Administrator, Application Administrator, or owner of the service principal.

Navigate to App launchers:

Go to Identity > Applications > Enterprise applications.

Under Manage, select App launchers.

Create a new collection:

Click on New collection.

Enter “Operations” as the Name for the collection.

Provide a Description if necessary.

Add applications to the collection:

Select the Applications tab within the new collection.

Click on + Add application.

Search for and select LinkedIn and Box applications.

Click Add to include them in the collection.

Assign the collection to the Sg-Operations group:

Select the Users and groups tab.

Click on + Add users and groups.

Search for and select the Sg-Operations group.

Click Select to assign the collection to the group.

Review and create the collection:

Select Review + Create to check the configuration.

If everything is correct, click Create to finalize the collection.

By following these steps, when users in the Sg-Operations group visit the My Apps portal, they will see a new tab named “Operations” that contains only the LinkedIn and Box applications1.

Please note that to create collections on the My Apps portal, you need a Microsoft Entra ID P1 or P2 license1.

According to the Microsoft SC-300: Identity and Access Administrator Study Guide and the Microsoft Learn module “Implement and manage synchronization for Azure AD”, Azure AD Connect Cloud Sync is the preferred solution when you need to synchronize objects from multiple Active Directory (AD DS) forests without establishing forest trusts.

The scenario specifies that trust relationships must NOT be established between adatum.com and litware.com, but A. Datum must still sync the AD DS users and groups of litware.com to their existing Azure AD tenant (adatum.com).

The SC-300 training materials clarify:

“Azure AD Connect cloud sync enables syncing from multiple AD forests to a single Azure AD tenant without the need for forest trusts or a full Azure AD Connect installation in each forest.”

Unlike staging mode (which provides a standby sync server for failover) or extending the same Azure AD Connect instance to another domain (which requires trust relationships and network connectivity between forests), Azure AD Connect Cloud Sync uses lightweight agents and does not depend on forest trust.

Therefore, to meet the requirement of syncing Litware’s AD DS to A. Datum’s Azure AD tenant without creating a trust, the correct choice is to configure Azure AD Connect Cloud Sync between the Azure AD tenant and the litware.com domain.

According to the Microsoft Identity and Access Administrator (SC-300) official study guide and Microsoft Learn module “Implement and manage user risk policies”, the scenario where “users must be forced to change their password if there is a probability that their identity was compromised” directly maps to the Azure AD Identity Protection “User risk policy.”

In Azure AD Identity Protection, user risk represents the likelihood that an account’s credentials have been compromised. When Azure AD detects a high user risk (for example, leaked credentials, atypical sign-in behavior, or sign-ins from unfamiliar locations), the User Risk Policy can be configured to automatically block access or require the user to reset their password upon the next sign-in.

Before a user can reset their password or complete remediation, they must have a registered authentication method (for password reset and MFA). Therefore, users must first register for multi-factor authentication (MFA) — this registration enables the authentication methods (like phone number or authenticator app) that are also used during password reset verification.

The SC-300 documentation specifically highlights:

“To enforce a password change when a user’s identity risk is high, the user must be registered for MFA, and a user risk policy must be configured to require password change.”

Thus, the correct configuration is:

Users must first register for MFA — to ensure they have verified methods available.

Configure a user risk policy — to automatically trigger password reset upon detection of compromised credentials.

Correct Answers:

Users must first: Register for multi-factor authentication (MFA).

You must configure: A user risk policy.

The SC-300 coverage of Azure AD Connect explains that when you need to bring in a new set of on-premises users or change what is synchronized (for example, adding an additional domain/OU such as ADatum or adjusting filtering), you reopen the Azure AD Connect wizard and choose “Customize synchronization options.” The guide notes that this path lets you “modify directory/OU filtering, add or remove forests, and enable optional sync features” so that only the intended users are synchronized. It contrasts with operational commands: Start-ADSyncSyncCycle merely triggers an immediate delta/full sync of the current configuration; Set-ADSyncScheduler changes the sync cadence or pause/resume behavior; and “Change user sign-in” alters the authentication method (e.g., PHS vs. PTA) but does not control scoping of which users are synced. To meet a requirement to sync the ADatum users according to technical constraints (such as OU/domain selection or feature toggles), you must first configure the scope by running the wizard and selecting Customize synchronization options, then perform/allow a sync cycle to bring those users into Azure AD as defined.

 The users must first: Register for multi-factor authentication (MFA)

 You must configure: A user risk policy

According to Microsoft SC-300 official learning materials and Exam Ref SC-300: Microsoft Identity and Access Administrator, when the requirement is to address the probability that user identities were compromised, the appropriate feature is Azure AD Identity Protection. Identity Protection detects risky sign-ins and risky users through continuous analysis of login behavior, location, device, and credential exposure signals.

Two types of policies can be created:

Sign-in risk policy – Triggers actions based on suspicious sign-in behavior (for example, unfamiliar location).

User risk policy – Triggers actions when the user’s overall identity is deemed at risk (for example, compromised credentials).

The documentation specifies:

“When user risk is detected, the policy can require the user to change their password to remediate the risk. Users must first be registered for MFA to perform secure password change operations.”

Therefore, before the user risk policy can be enforced, users must be enrolled in multi-factor authentication (MFA). MFA is used during the remediation step (password change) to verify the user’s identity securely.

Thus, to meet the requirement for “the probability that user identities were compromised,” you configure a user risk policy in Azure AD Identity Protection, and ensure that users first register for MFA so that they can complete password change or verification flows when risks are detected.

As per the Microsoft SC-300: Identity and Access Administrator official study materials and Microsoft Learn documentation on “Manage administrative units in Azure Active Directory”, Administrative Units (AUs) are designed to delegate administrative permissions within large organizations based on divisions such as geography or department. They provide scoped administrative control—allowing helpdesk or user administrators to manage users only within a specific subset of the directory, such as a branch office or department.

In this scenario, Contoso’s technical requirement states:

“The helpdesk administrators must be able to manage licenses for only the users in their respective office.”

To fulfill this, you must create an administrative unit for each branch office (e.g., Montreal, London, Seattle) and assign helpdesk administrators scoped to those AUs. This ensures that each helpdesk admin can only manage licenses for the users within their respective office, enforcing the principle of least privilege.

The Azure Active Directory admin center is the correct tool for creating and managing administrative units. SC-300 guidance clarifies that administrative units are Azure AD objects, not on-premises Active Directory objects like Organizational Units (OUs). Therefore, they are created and managed exclusively through the Azure portal, Microsoft Graph, or PowerShell for Azure AD, but the most straightforward interface for exam purposes is the Azure AD admin center.

In Azure AD, license automation is implemented through group-based licensing. The SC-300 materials explain that “you can assign licenses to a group in Azure Active Directory; when you assign a license to a group, all users who are members of the group are assigned that license”. They also clarify that “dynamic group membership uses rules to automatically add or remove users based on user attributes”, which is the recommended way to on-board new populations without manual effort. For licensing, the guide is explicit that “group-based licensing works with security groups and Microsoft 365 Groups” and that “distribution lists are not supported for license assignment”. Administrative Units are described as “a scoping mechanism for delegating administrative permissions to subsets of users and devices”, not a licensing entity. Likewise, Organizational Units (OUs) are on-premises AD containers and “do not control license assignment in Azure AD”.

Given the requirement to allocate licenses automatically to new A. Datum users as they appear, the least-effort, policy-driven approach is to create an Azure AD Dynamic User security group with a membership rule that targets those users (for example, by domain, company attribute, or a synced attribute), then assign the required Microsoft 365/Azure AD licenses to that group. As the documentation notes, “when users join or leave the group based on the rule, licenses are added or removed automatically.”

To meet auditing and monitoring requirements, Azure AD must send sign-in logs and audit logs to an external location such as a Log Analytics workspace, Azure Storage account, or Event Hub. This is configured using Diagnostics settings in Azure AD.

According to Microsoft documentation in “Monitor Azure Active Directory activity logs in Azure Monitor” and the SC-300 learning objective “Implement and monitor identity governance”, you must enable diagnostic settings to stream directory logs to a Log Analytics workspace.

The scenario specifies:

“You create a Log Analytics workspace. You need to implement the technical requirements for auditing.”

By configuring Azure AD’s Diagnostics settings, you can:

Send Sign-in logs, Audit logs, and Provisioning logs to Log Analytics.

Correlate identity events with security insights in Azure Sentinel or Microsoft Defender for Cloud Apps.

Microsoft documentation confirms:

“To collect and analyze Azure AD sign-in and audit data, configure diagnostic settings to send logs to Log Analytics.”

Other options do not meet the requirement:

A. Company branding: Only affects login pages, not logging or auditing.

C. External Identities: Controls guest access, not logging.

D. App registrations: Used for app integration, not auditing.

According to the Microsoft SC-300: Identity and Access Administrator official study guide and Microsoft Learn modules on Azure AD Identity Governance, the correct way to manage user access—especially for scenarios involving both internal and external users—is through Entitlement Management in Azure AD Identity Governance.

Entitlement Management uses access packages to define and automate how users obtain access to resources such as groups, SharePoint sites, and applications. Access packages contain policies that specify who can request access (internal users, external users, or both) and how that access is approved and periodically reviewed. The guide clearly states:

“Access packages provide a structured method to configure and automate access for users, ensuring that access assignments follow the organization’s policy and compliance requirements.”

To enable external collaboration with another organization (such as fabrikam.com), Microsoft documentation emphasizes that you must create a connected organization. A connected organization represents an external directory or domain whose users can be invited to request access packages or participate in identity governance workflows. The connected organization defines trust boundaries for cross-tenant collaboration, without requiring domain federation or acceptance.

In summary:

Access packages configure and automate user access.

According to the Microsoft SC-300: Identity and Access Administrator official study guide and the Microsoft Learn module “Manage user and group licenses in Microsoft Entra ID (Azure AD)”, when you need to automatically assign licenses to users based on specific attributes (such as department, location, or a custom attribute like LWLicenses), you should use a Dynamic User Security Group in Azure Active Directory (Entra ID).

In the scenario, Litware wants to:

“Manage the assignment of Azure AD licenses by modifying the value of the LWLicenses attribute. Users who have the appropriate value for LWLicenses must be added automatically to the Microsoft 365 group that has the appropriate license assigned.”

This requirement directly maps to a Dynamic User security group, which supports dynamic membership rules that automatically include users when their attributes meet defined conditions (for example, user.extensionAttribute15 -eq "E5"). When a license is assigned to this dynamic group, Azure AD automatically provisions or removes licenses for members based on their attribute values — eliminating manual license management.

Per Microsoft documentation:

“You can assign licenses to a group that has dynamic membership. When a user’s attributes change, Azure AD automatically adds or removes them from the group, which updates their license assignments accordingly.”

Now, analyzing the other options:

B. An OU (Organizational Unit): Used in on-premises Active Directory, not Azure AD. It cannot manage cloud-based license assignments.

C. A Distribution Group: Used for email distribution in Exchange Online; cannot be used for license assignment.

D. An Administrative Unit: Used for scoping administrative permissions, not for license assignment.

Therefore, the only object type that satisfies both the technical and automation requirements is a Dynamic User Security Group.

✅ Correct Answer: A. A Dynamic User security group

According to the Microsoft SC-300: Identity and Access Administrator Study Guide and the Microsoft Learn module “Publish on-premises apps for remote access using Azure AD Application Proxy”, Azure AD Application Proxy enables secure remote access to internal, on-premises web applications without requiring VPN access.

In the scenario, App1 is an on-premises application hosted within the Litware network, and the technical requirements specify that it must be securely accessible to both internal and external users — including Fabrikam guest accounts — through Azure AD authentication.

Microsoft’s official documentation states:

“Azure AD Application Proxy provides secure remote access to on-premises web applications, integrating with Azure AD for single sign-on (SSO) and conditional access policies.”

Given that the environment already includes a server (SERVER1) running the Azure AD Application Proxy connector, and that Litware wants to enforce Azure AD Conditional Access and MFA for App1, Azure AD Application Proxy is the correct implementation.

The other options are not suitable:

A. Policy set in Microsoft Endpoint Manager: Used for device compliance and app management, not for publishing on-premises apps.

B. App configuration policy in Endpoint Manager: Used for mobile app configuration (e.g., MAM policies), not for access publishing.

C. App registration in Azure AD: Used for modern cloud or SaaS apps integration, but App1 is on-premises and needs proxy access.

Correct Answer: D. Azure AD Application Proxy

In Azure AD Privileged Identity Management (PIM) for Azure AD roles, the exam materials describe that you tailor how a role (for example, User administrator) is used by editing its Role settings. These settings control activation behavior, including require multi-factor authentication, justification, approval, assignment/activation durations, and notifications. The guide states that administrators can “configure activation requirements and time-bound eligibility on a per-role basis” and “enforce approval workflows and MFA at activation.” Access reviews are used to periodically verify who still needs a role, but they do not implement the operational changes to how the role is activated. Active assignments simply shows and changes who currently holds active/eligible assignments; it does not set policy for the role’s activation behavior. Administrative units scope certain directory tasks, but they are not how you change PIM activation/approval/MFA requirements. Therefore, to meet planned changes for the User administrator role (such as least privilege activation with approval, justification, and MFA), you update PIM → Azure AD roles → User administrator → Role settings. This aligns with the SC-300 objective to “configure PIM settings and policies for Azure AD roles,” ensuring governance by policy rather than ad-hoc assignment.