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The problem described in the case study states that “Cloud App Security frequently generates false positive alerts when users connect to both offices simultaneously.” This behavior is commonly associated with the “Impossible travel” anomaly detection policy in Microsoft Defender for Cloud Apps.

According to Microsoft documentation, the “Impossible travel” policy detects when a user signs in from two locations that are geographically distant within an unrealistic timeframe. However, in multi-office environments (such as Boston and Seattle) or when VPN connections are used, this policy can frequently trigger false positives, since it may misinterpret legitimate connections as anomalous.

Microsoft recommends adjusting the impossible travel detection policy to account for trusted IP ranges, known locations, or VPN endpoints to reduce false alerts. Specifically, administrators can modify the policy’s sensitivity, include the organization’s office IP addresses as trusted, and exclude known network ranges.

This approach directly aligns with the case study’s scenario and satisfies the Defender for Cloud Apps requirement to reduce false positives while maintaining user anomaly detection accuracy.

✅ Final Answer for Question 3: D. Impossible travel

To block unsanctioned cloud apps on Windows 10 endpoints with Microsoft Defender for Endpoint and Microsoft Defender for Cloud Apps (formerly Cloud App Security), you must enable and configure the product integration on both sides. First, in Microsoft Defender Security Center → Settings → Advanced features, turn on the Microsoft Defender for Cloud Apps integration (and ensure network protection prerequisites are met). This allows Defender for Endpoint to receive the unsanctioned app list and enforce endpoint-based blocking when users on CLIENT1 attempt to access those apps via the browser or client.

Second, in Defender for Cloud Apps → Settings → Cloud Discovery, configure the Microsoft Defender for Endpoint integration and enable Block unsanctioned apps. In Cloud Discovery, apps are discovered, assessed, and can be tagged as Unsanctioned. Once the MDE integration is enabled, that tag is exported to endpoints, which then enforce blocking based on the tenant’s app catalog and policies.

Options A (Onboarding settings) are for enrolling devices and do not control app blocking behavior. B (Anomaly detection policies) govern behavioral detections (e.g., impossible travel, anonymous IP) and are unrelated to endpoint enforcement of app access. Therefore, the two configurations you must modify to meet the requirement “block unsanctioned apps on Windows 10 computers by using Microsoft Defender for Endpoint” are C. Advanced features in Microsoft Defender Security Center and D. Cloud Discovery settings in Cloud App Security.

To integrate Microsoft Defender for Cloud Apps (MCAS) with Microsoft Sentinel, Microsoft’s official SecOps and Sentinel documentation specifies a two-step configuration process.

In the Defender for Cloud Apps portal – You add a security extension to enable integration with external SIEM platforms. This action allows MCAS to forward its alerts, activities, and discovered app telemetry to other Microsoft or third-party security platforms. By adding the security extension, Defender for Cloud Apps is authorized to send data streams and alerts to Microsoft Sentinel through a supported API connection.

In Microsoft Sentinel (Azure portal) – You then add a data connector. Data connectors in Sentinel are predefined integration pipelines that bring in telemetry from Microsoft or external security solutions. The Microsoft Defender for Cloud Apps connector specifically ingests MCAS alerts and audit logs into Sentinel, where they can be correlated with other Microsoft Defender XDR signals, enabling unified detection and investigation across identity, endpoint, and cloud layers.

This integration approach adheres to Microsoft’s principle of minimizing administrative effort by using native connectors rather than custom ingestion or log collector configurations. Once connected, Sentinel automatically normalizes MCAS alerts into its SecurityAlert and CloudAppEvents tables for rule creation, playbook automation, and incident correlation.

Therefore, the verified correct configuration is:

Defender for Cloud Apps: Add a security extension

Sentinel: Add a data connector

According to Microsoft’s official Defender for Identity deployment documentation, setting up Microsoft Defender for Identity (MDI) on an on-premises domain controller (DC) such as DC1 requires a specific sequence of steps. MDI monitors and protects Active Directory from advanced threats by using sensors installed directly on domain controllers.

The correct sequence is as follows:

1️⃣ Provide global administrator credentials to the Azure AD tenant.

Microsoft Defender for Identity is created and managed in the Microsoft 365 Defender portal or Microsoft Security portal, which requires global administrator permissions to provision the MDI instance and connect it to the Azure AD tenant.

2️⃣ Create an instance of Microsoft Defender for Identity.

You must create an MDI instance in the portal before deploying any sensors. This instance defines your Defender for Identity workspace and generates the configuration package that sensors will later use to connect to the cloud service.

3️⃣ Provide domain administrator credentials to the on-premises Active Directory domain.

Domain admin credentials are required for the sensor installation because the sensor must access the domain controller’s security logs, event logs, and directory services to monitor authentication traffic and suspicious activities.

4️⃣ Install the sensor on DC1.

Since DC1 is a domain controller connected directly to the internet, the standard sensor (not the standalone sensor) is installed directly on it. The standalone sensor is used only when you do not want to install the sensor directly on a DC. The sensor automatically connects to the created MDI instance and begins collecting telemetry for detection.

This sequence aligns with Microsoft Defender for Identity deployment guidance, ensuring secure onboarding of DC1 while maintaining the principle of least privilege and meeting the business requirement to protect all domain controllers.

✅ Final Order:

Provide global administrator credentials →

Create instance of Microsoft Defender for Identity →

Provide domain administrator credentials →

Install the sensor on DC1.