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Microsoft AI-103

AI-103

Exam Code: AI-103

Exam Name: Developing AI Apps and Agents on Azure

Updated: Sep 16, 2026

Q & A: 159 Questions and Answers

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Microsoft AI-103 Exam Syllabus Topics:

SectionObjectives
Topic 1: Develop Generative AI Applications and Agents- Azure OpenAI Service integration
  • 1. Function calling and tool use
    • 2. Prompt engineering and prompt flow design
      - AI agents architecture
      • 1. Agent orchestration and workflows
        • 2. Memory and state management
          Topic 2: Implement Computer Vision Solutions- OCR and document intelligence
          - Image classification and object detection
          Topic 3: Knowledge Mining and Information Retrieval- Indexing and semantic search
          - Azure AI Search configuration
          - RAG (Retrieval Augmented Generation) patterns
          Topic 4: Implement Natural Language Processing Solutions- Language understanding and intent recognition
          - Text analytics and summarization
          - Translation and multilingual support
          Topic 5: Plan and Manage Azure AI Solutions- Model selection and lifecycle management
          - Azure AI resource provisioning and configuration
          - Responsible AI principles and governance

          Microsoft Developing AI Apps and Agents on Azure Sample Questions:

          Question #1
          A legal team must extract clauses and inferred fields from unstructured contracts. One required field is the contract end date, which is not stated explicitly and must be derived from the start date plus the term. The team has no labelled training data. Which tool best fits?

          A. The Azure AI Search semantic ranker
          B. Azure Content Understanding using a prebuilt-contract or zero-shot custom analyser
          C. Azure Translator in Foundry Tools
          D. An Azure AI Document Intelligence custom model trained on labelled samples


          Question #2
          You have a Microsoft Foundry project that contains an agent for a customer support chat app.
          The agent uses a memory store and a memory search tool.
          You need to ensure that the conversation history does NOT persist across separate sessions.
          To what should you set the scope of the memory tool?

          A. {{$conversationId}}
          B. {{$userId}}
          C. global
          D. session


          Question #3
          You have a Microsoft Foundry agent that grounds responses from an Azure Search index that contains the following:
          - Searchable text fields for product names and product codes
          - A vector field that stores embeddings for product descriptions
          You need to ensure that users can query the index by using the following:
          - Exact product names or codes
          - Natural language descriptions of the products
          What should you configure?

          A. hybrid search
          B. vector search only
          C. semantic search only
          D. keyword search only


          Question #4
          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 an indexing pipeline for Agent1 to retrieve the relevant product information in storage1. The solution must meet the technical requirement.
          Which two built-in skills should you use? Each correct answer presents part of the solution.
          NOTE: Each correct selection is worth one point.

          A. Language Detection
          B. Text Split
          C. Azure OpenAI Embedding
          D. Merge
          E. key phrase extraction
          F. Entity Recognition


          Question #5
          Note: This section contains one or more sets of questions with the same scenario and problem. Each question presents a unique solution to the problem. You must determine whether the solution meets the stated goals. More than one solution in the set might solve the problem. It is also possible that none of the solutions in the set solve the problem.
          After you answer a question in this section, you will NOT be able to return. As a result, these questions do not appear on the Review Screen.
          You have a multimodal AI generative model that accepts image uploads and uses extracted image text to generate responses.
          You discover that users can upload unsafe images and embed hidden instructions into images to manipulate the model.
          You need to implement controls to mitigate the risk.
          Solution: You configure a prompt shield for documents.
          Does this meet the goal?

          A. No
          B. Yes


          Solutions:

          Question #1
          Correct Answer: B
          Question #2
          Correct Answer: D
          Question #3
          Correct Answer: A
          Question #4
          Correct Answer: B,C
          Question #5
          Correct Answer: B

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