Question
You have a Microsoft 365 E5 subscription that contains three DOCX files named File1, File2, and File3.
You create the sensitivity labels shown in the following table.
| Name | Permission | Apply content marking |
| --- | --- | --- |
| Label1 | Any authenticated users: Viewer | Disabled |
| Label2 | None | Enabled |
You apply the labels to the files as shown in the following table.
| File | Label |
| --- | --- |
| File1 | None |
| File2 | Label1 |
| File3 | Label2 |
You ask Microsoft 365 Copilot to summarize the files, and you receive the results shown in the following table.
| Name | Based on content of |
| --- | --- |
| Summary1 | File1, File3 |
| Summary2 | File2 |
| Summary3 | File1, File2, File3 |
For each of the following statements, select Yes if the statement is true. Otherwise, select No.
NOTE: Each correct selection is worth one point.
Explanation
Statement 1 (Yes): Copilot output inherits the highest-priority sensitivity label of the items it was based on. Summary1 uses File1 (unlabeled) and File3 (Label2), so it inherits Label2; whether a label applies encryption or content marking does not matter for inheritance.
Statement 2 (Yes): Summary2 is based only on File2, which has Label1, so the summary inherits Label1. You applied the label yourself, and the person who applies encryption is the Rights Management owner with all usage rights, which is why Copilot could summarize it.
Statement 3 (Yes): Summary3 draws on File2 (Label1) and File3 (Label2), so it inherits whichever of those labels has the higher priority. An unlabeled source file such as File1 does not stop the label from being inherited.
