Microsoft AI-103 : Developing AI Apps and Agents on Azure

AI-103 real exams

Exam Code: AI-103

Exam Name: Developing AI Apps and Agents on Azure

Updated: Sep 14, 2026

Q & A: 159 Questions and Answers

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Microsoft AI-103 Exam Syllabus Topics:

SectionWeightObjectives
Implement computer vision solutions10–15%- Build multimodal solutions
  • 1. Combine vision and language capabilities
  • 2. Process and analyze video content
- Implement image analysis and processing
  • 1. Extract text and structure from images
  • 2. Use Azure AI Vision services
  • 3. Implement object detection and image classification
Implement text and speech analysis solutions10–15%- Implement natural language processing
  • 1. Perform sentiment analysis, entity recognition, and summarization
  • 2. Build conversational language understanding
  • 3. Use Azure AI Language services
- Implement speech capabilities
  • 1. Speech translation and speaker recognition
  • 2. Speech-to-text and text-to-speech integration
Implement generative AI and agentic solutions30–35%- Build generative AI applications
  • 1. Build retrieval-augmented generation (RAG) solutions
  • 2. Integrate Azure OpenAI and other models
  • 3. Implement function calling and tool use
  • 4. Implement prompt engineering and optimization
- Design and implement intelligent agents
  • 1. Implement multi-agent workflows and orchestration
  • 2. Manage state, memory, and context
  • 3. Select agent architecture patterns
  • 4. Integrate agents with external systems and data sources
Implement information extraction and knowledge mining10–15%- Extract structured data from documents
  • 1. Process forms, invoices, and unstructured content
  • 2. Use Azure AI Document Intelligence
- Build knowledge bases and search solutions
  • 1. Design knowledge mining pipelines
  • 2. Create and manage vector indexes
  • 3. Implement Azure AI Search
Plan and manage Azure AI solutions25–30%- Manage AI solution development lifecycle
  • 1. Configure model and agent deployments
  • 2. Integrate with CI/CD pipelines
  • 3. Monitor and maintain AI workloads
- Design Azure AI infrastructure
  • 1. Design for scalability, availability, and cost optimization
  • 2. Plan for security, compliance, and responsible AI
  • 3. Select appropriate Azure AI Foundry services

Microsoft Developing AI Apps and Agents on Azure Sample Questions:

Question #1

Case Study 1 - Contoso, Ltd
Overview
Company Information
Contoso, Ltd is a multinational retail company that builds, deploys, and manages generative AI and agent-based solutions by using Microsoft Foundry.
Existing Environment
Identity Environment
Contoso uses Microsoft Entra ID for identity management, authentication, and authorization capabilities that enable agents to access organizational resources and services.
Contoso recently formed a new AI engineering team named Agent1Dev Team to optimize and maintain existing AI solutions.
The team collaborates with solution architects, DevOps engineers, and security engineers to design, implement. monitor, and secure AI applications.
Contoso also has a team named Agent1Test Team that is responsible for validating AI solutions before the solution deployments.
Generative Environment
Contoso has a Microsoft Foundry deployment that contains two projects named Project1 and Project2.
Project1
Project1 contains a customer support agent named Agent1 that assists customers with product inquiries and troubleshooting requests.
Agent1 has the following configurations:
- Agent1 uses a base model deployment.
- A safety evaluation pipeline is NOT enabled.
- Tool invocation approval workflows are NOT enabled.
- Conversation memory constraints are NOT configured.
Agent1 interacts with customers by using digital support channels and answers general questions about Contoso products.
Project1 is deployed to an Azure region located in the European Union (EU).
Agent1Dev Team will use Project1 to optimize and maintain Agent1.
Project2
Project2 contains a deployed video generation model. The marketing department at Contoso has access to Project2 and plans to use the model to develop a video creation solution.
Development of the solution is incomplete.
Data Environment
Contoso stores product-related information in Azure resources that support AI applications.
The Azure environment contains an Azure Blob Storage account named storage1 that stores product detail sheets for all the Contoso products.
The product sheets include specifications, feature descriptions, and product support information that Agent1 can use to answer customer questions. The product sheets are stored in the PDF format.
Problem Statements
Contoso identifies the following issues:
- Agent1 has only general knowledge of the Contoso products.
- A recent chat interaction with Agent1 was analyzed for sentiment. The results of the analysis have NOT been processed yet.
- Agent1 does NOT use the detailed product information in the product sheets stored in storage1 when responding to customer questions.
- The finance department at Contoso reports that vendor invoices must be reviewed manually to ensure that the invoices match the terms defined in the vendor contracts. The invoices contain tables, logos, and varied layouts that make the documents difficult to process consistently.
Requirements
Planned Changes
Contoso plans to implement the following changes:
- Implement a solution for Project1 that analyzes the vendor invoices by evaluating both the visual layout and the textual content of the invoices, so that the invoice details can be verified against the vendor contract terms.
- Update the base model deployment used by Agent1 and standardize the model version to ensure continuity and consistent responses.
- Enable Agent1 to retrieve and use the detailed product information from the product sheets stored in storage1.
- Implement an indexing solution for the product sheets that Agent1 can use to answer customer questions.
- Complete the development of the video creation solution.
Technical Requirements
Contoso identifies the following technical requirements:
- The model deployment used by Agent1 must support scalable, high-throughput generative AI workloads and dynamically scale to handle variable customer support traffic, without requiring reserved throughput capacity.
- The product sheets must be processed by using an indexing pipeline that enables semantic and vector search, so that Agent1 can retrieve the relevant product information.
- Responses generated by using the product sheet information must be relevant, complete, and accurate.
- Agent1 must be able to use the product sheets to answer natural language questions about product details.
- The model version used by Agent1 must remain consistent to ensure stable responses.
- The data processed by the model must remain within the EU.
Security and Compliance Requirements
Contoso identifies the following security and compliance requirements:
- API keys must NOT be used to access Foundry-deployed models.
- Access to the Azure resources must follow the principle of least privilege.
- The developers at Contoso must authenticate to Microsoft Foundry resources by using Microsoft Entra authentication.
- Access to Project1 must be assigned to the members of Agent1Dev Team by using a security group named SC_Agent1_Dev.
- Access to Project1 must be assigned to the members of Agent1Test Team by using a security group named SC_Agent1_Test.
- Agent1 must never reveal customer information, even if a document that contains customer data is added erroneously to the product sheet repository in storage1.
- The product sheets might contain images that include embedded text. Agent1 must be protected from malicious instructions potentially hidden within the images.
Business Requirements
Contoso identifies the following business requirements:
- Users that interact with Agent1 must have a personalized experience in future interactions, including the ability for Agent1 to retain conversation context and recall relevant information from previous interactions.
- Agent1 must answer questions only about the products sold by Contoso.
Hotspot Question
You need to ensure that Agent1Dev Team can access Agent1. The solution must meet the security and compliance requirements.
How should you complete the Python code? To answer, select the appropriate options in the answer area.
NOTE: Each correct selection is worth one point.

Reveal Solution  Discussion  0

Correct Answer:


Explanation:
Scenario:
Contoso recently formed a new AI engineering team named Agent1Dev Team to optimize and maintain existing AI solutions.
Agent1Dev Team will use Project1 to optimize and maintain Agent1.
Security and Compliance Requirements:
API keys must NOT be used to access Foundry-deployed models.
Access to the Azure resources must follow the principle of least privilege.
The developers at Contoso must authenticate to Microsoft Foundry resources by using Microsoft Entra authentication.
Box 1: DefaultAzureCredential
The correct credential type to use for the team is DefaultAzureCredential.
Enforces Keyless Access: DefaultAzureCredential fulfills the first security requirement by using token-based authentication. This completely eliminates the need for hardcoded API keys.
Enables Least Privilege: It integrates seamlessly with Microsoft Entra ID Role-Based Access Control (RBAC). This allows administrators to assign exact granular roles (such as the Azure AI Developer or Foundry User role).
Native Entra Integration: It automatically manages token acquisition from Microsoft Entra ID during runtime, satisfying the requirement for native Microsoft Entra authentication.
Box 2: get
The get method fetches the existing, consumer-facing definition of an agent using its unique name argument (agent_name). In contrast, create_version would attempt to build a brand new snapshotted runtime configuration, and get_version requires passing a specific version identifier rather than a friendly agent name Reference:
https://learn.microsoft.com/en-us/dotnet/ai/azure-ai-services-authentication
https://learn.microsoft.com/en-us/azure/app-service/tutorial-ai-agent-web-app-langgraph-foundry-python

Question #2

You have a Microsoft Foundry project.
You need to deploy a model from the model catalog to support real-time inference. The solution must meet the following requirements:
- Use key-based authentication.
- Support real-time REST API access.
- NOT consume the vCPU quota of the virtual machines in the Azure
subscription.
Which type of deployment should you use?

  • A. standard
  • B. serverless API
  • C. batch
  • D. self-hosted container
Reveal Solution  Discussion  0

Correct Answer: A  🗳️

Explanation: Only visible for Real4dumps members. You can sign-up / login (it's free).

Question #3

Hotspot Question
You have a Microsoft Foundry project that contains an internal Q&A agent.
Users report the following issues when they ask the agent questions:
- An increase in the following response: "No relevant information
found"
- Periodic HTTP 429 rate limit exceeded errors during peak hours
You need to identify whether each issue is caused by model unavailability, resource limits, or inference failures.
What should you do? To answer, select the appropriate options in the answer area.
NOTE: Each correct selection is worth one point.

Reveal Solution  Discussion  0

Correct Answer:

Question #4

You have a Microsoft Foundry project that contains an agent.
The knowledge source for the agent is a set of scanned PDF troubleshooting guides stored in Azure Blob Storage. The guide pages contain two-column layouts and tables.
You use Azure Content Understanding in Foundry Tools to process the PDFs.
You plan to ingest the processed content into an index for Retrieval Augmented Generation (RAG) and store extracted fields for downstream automation.
Stakeholders must be able to verify where each extracted field value came from in the original PDF and route low-reliability extractions for manual review.
You need to ensure that the Content Understanding document analyzer output includes a per- field confidence score and source grounding to locations within the source document.
What should you do?

  • A. Configure the analyzer to use generative extraction for all fields.
  • B. Provide labeled samples.
  • C. Set enableSegment to true.
  • D. Enable estimateFieldSourceAndConfidence.
Reveal Solution  Discussion  0

Correct Answer: D  🗳️

Explanation: Only visible for Real4dumps members. You can sign-up / login (it's free).

Question #5

Hotspot Question
You have an Azure subscription.
You need to create a new resource that will generate fictional stores in response to user prompts.
The solution must ensure that the resource uses a customer-managed key to protect data.
How should you complete the script? To answer, select the appropriate options in the answer area.
NOTE: Each correct selection is worth one point.

Reveal Solution  Discussion  0

Correct Answer:


Explanation:
Box 1: OpenAI
To generate fictional stores in response to user prompts, you need a generative AI model (such as GPT-3.5 or GPT-4). The Azure OpenAI service natively supports this generative capability and allows you to secure your deployed models and data using customer-managed keys (CMK).
Box 2: --assign-identity
When defining the Azure Key Vault resource script to enable customer-managed keys (CMK), you must use --assign-identity (or assign-identity).
Reference:
https://learn.microsoft.com/en-us/azure/search/search-how-to-managed-identities

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