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

AI-103 real exams

Exam Code: AI-103

Exam Name: Developing AI Apps and Agents on Azure

Updated: Sep 13, 2026

Q & A: 159 Questions and Answers

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Microsoft AI-103 Exam Syllabus Topics:

SectionWeightObjectives
Topic 1: Implement agentic solutions20-25%- Build AI agents
  • 1. Integrate tools and external knowledge
  • 2. Configure memory and orchestration
  • 3. Create autonomous and multi-agent workflows
- Manage agent operations
  • 1. Secure agent interactions
  • 2. Monitor and debug agents
  • 3. Implement scalable deployments
Topic 2: Plan and manage Azure AI solutions25-30%- Plan Azure AI resources
  • 1. Select Azure AI services and Foundry resources
  • 2. Manage deployments and monitoring
  • 3. Configure authentication and security
- Manage AI solution lifecycle
  • 1. Monitor model and application performance
  • 2. Implement CI/CD for AI applications
  • 3. Apply responsible AI practices
Topic 3: Implement generative AI solutions25-30%- Optimize and evaluate models
  • 1. Evaluate responses and grounding
  • 2. Implement multimodal AI capabilities
  • 3. Configure content filters and safety
- Develop generative AI applications
  • 1. Use Azure OpenAI and Foundry models
  • 2. Implement prompt engineering
  • 3. Build retrieval-augmented generation solutions
Topic 4: Implement computer vision solutions10-15%- Analyze visual content
  • 1. Implement OCR and visual understanding
  • 2. Use multimodal vision APIs
  • 3. Process images and video
Topic 5: Implement text analysis and information extraction solutions10-15%- Analyze and extract information
  • 1. Extract entities and structured data
  • 2. Use document intelligence services
  • 3. Implement natural language processing

Microsoft Developing AI Apps and Agents on Azure Sample Questions:

Question #1

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

Question #2

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.
You need to configure personalized user interactions for Agent1. The solution must meet the business requirements.
What should you include in the solution?

  • A. memory
  • B. guardrails
  • C. tools
  • D. knowledge
Reveal Solution  Discussion  0

Correct Answer: A  🗳️

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Question #3

You have a Microsoft Foundry project that generates short promotional product videos.
After several clips are approved, reviewers notice a small watermark in the top-right corner of some videos.
You need to remove the watermark without regenerating the videos.
What should you do?

  • A. Apply a mask-based inpainting edit to the affected part of the video.
  • B. Modify the original prompt to exclude watermarks.
  • C. Increase the guidance scale.
  • D. Crop the video by using the size parameter.
Reveal Solution  Discussion  0

Correct Answer: A  🗳️

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Question #4

You are deploying a support agent that enables users to upload photos.
You need to automatically classify uploaded images for harmful content. The solution must block content based on severity levels.
What should you do?

  • A. Apply keyword scanning to optical character recognition (OCR) output by using Azure Vision in Foundry Tools.
  • B. Use blocklists.
  • C. Enable prompt shields.
  • D. Implement image moderation.
Reveal Solution  Discussion  0

Correct Answer: D  🗳️

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Question #5

You have a Microsoft Foundry project that contains an agent. The agent has a Model Context Protocol (MCP) tool that queries a knowledge base stored in Azure AI Search.
Some agent runs return answers from the base model without invoking the knowledge base, which results in responses without grounded citations.
You are provided with the following code snippet that runs the agent.

You need to add the correct tool _choiceparameter to the code to deterministically force the agent to invoke the MCP tool on each run.
What should you add?

  • A. tool_choice={"required"}
  • B. tool_choice={"type":"knowledge_base"}
  • C. tool_choice ={"type":"mcp"}
  • D. tool_choice={"auto"}
Reveal Solution  Discussion  0

Correct Answer: A  🗳️

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

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