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

  • Exam Code: AI-103
  • Exam Name: Developing AI Apps and Agents on Azure
  • Updated: Jul 15, 2026
  • Q & A: 107 Questions and Answers

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Microsoft Developing AI Apps and Agents on Azure Sample Questions:

1. You are defining an agent in Microsoft Foundry Agent Service. The agent uses a catalogue model for reasoning, a system instruction that sets its goals, and a file search capability that reads a knowledge store. Which three components does this combination represent?

A) Endpoint, API key, deployment name
B) Trigger, action, condition
C) Model, instructions, tools
D) Embedding, retriever, generator


2. Drag and Drop Question
You have a Microsoft Foundry project that contains an agent used by the financial analysts at your company.
You need to optimize the agent workflow by providing additional data access and processing capabilities. The solution must meet the following requirements:
- Ensure that the agent can perform calculations during conversations.
- Ensure that the agent can access up-to-date information from public
websites.
- Ensure that the agent can retrieve information from documents
uploaded directly to the agent.
What should you use for each requirement? To answer, drag the appropriate tools to the correct requirements. Each tool may be used once, more than once, or not at all. You may need to drag the split bar between panes or scroll to view content.
NOTE: Each correct selection is worth one point.


3. You have a customer support agent built by using the Microsoft Foundry Agent Service. The agent calls an Azure OpenAI model deployment.
During load testing, calls intermittently fail and return an HTTP 429 rate limit exceeded error.
You need to handle throttling to reduce call failures and improve reliability under load. The solution must remain within the service and model limits.
What should you do?

A) Create a new thread and retry the calls immediately.
B) Reduce the number of registered tools.
C) Spit uploaded content into smaller files.
D) Implement a retry policy that uses exponential backoff and jitter.


4. You configure Azure AI Content Safety to moderate user-uploaded images in a generative application. During testing, a colleague claims an image returned a Violence severity score of 3.
Why is this result impossible?

A) Image moderation always returns a binary blocked or allowed flag, never a severity
B) Severity 3 is reserved for the Self-Harm category only
C) Content Safety does not moderate images, only text
D) The image content model returns only severity values 0, 2, 4, and 6


5. A customer support agent must answer from an internal knowledge base that is updated weekly with new product documentation, and its answers must always reflect the latest content. Which approach should you implement?

A) Raise the model temperature to improve recall of recent facts
B) Apply Direct Preference Optimization (DPO) to the documents
C) Implement retrieval-augmented generation (RAG) over an index of the documents
D) Fine-tune the base model on the new documents every week


Solutions:

Question # 1
Answer: C
Question # 2
Answer: Only visible for members
Question # 3
Answer: D
Question # 4
Answer: D
Question # 5
Answer: C

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