Explanation
* Vendors must be able to authenticate by using their Microsoft account when accessing Contoso resources.
You can invite guest users to the directory, to a group, or to an application. After you invite a user through any of these methods, the invited user's account is added to Azure Active Directory (Azure AD), with a user type of Guest. The guest user must then redeem their invitation to access resources. An invitation of a user does not expire.
The invitation will include a link to create a Microsoft account. The user can then authenticate using their Microsoft account. In this question, the vendors already have Microsoft accounts so they can authenticate using them.
Reference:
https://docs.microsoft.com/en-us/azure/active-directory/b2b/add-users-administrator
Topic 3, Litware inc
Case study
This is a case study. Case studies are not timed separately. You can use as much exam time as you would like to complete each case. However, there may be additional case studies and sections on this exam. You must manage your time to ensure that you are able to complete all questions included on this exam in the time provided.
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To display the first question in this case study, click the Next button. Use the buttons in the left pane to explore the content of the case study before you answer the questions. Clicking these buttons displays information such as business requirements, existing environment, and problem statements. When you are ready to answer a question, click the Question button to return to the question.
Overview
General Overview
Litware, Inc. is a consulting company that has a main office in Montreal and a branch office in Seattle.
Litware collaborates with a third-party company named ADatum Corporation.
Environment
On-Premises Environment
The network of Litware contains an Active Directory domain named litware.com. The domain contains three organizational units (OUs) named LitwareAdmins, Montreal Users, and Seattle Users and the users shown in the following table.

The domain contains 2,000 Windows 10 Pro devices and 100 servers that run Windows Server 2019.
Cloud environment
Litware has a pilot Microsoft 365 subscription that includes Microsoft Office 365 Enterprise E3 licenses and Azure Active Directory Premium Plan 2 licenses.
The subscription contains a verified DNS domain named litware.com.
Azure AD Connect is installed and has the following configurations:
* Password hash synchronization is enabled.
* Synchronization is enabled for the LitwareAdmins OU only.
Users are assigned the roles shown in the following table.

Self-service password reset (SSPR) is enabled.
The Azure Active Directory (Azure AD) tenant has Security defaults enabled.
Requirements
Planned Changes
Litware identifies the following issues:
* Admin1 cannot create conditional access policies.
* Admin4 receives an error when attempting to use SSPR.
* Users access new Office 365 service and feature updates before the updates are reviewed by Admin2.
Technical Requirements
Litware plans to implement the following changes:
* Implement Microsoft Intune.
* Implement Microsoft Teams.
* Implement Microsoft Defender for Office 365.
* Ensure that users can install Office 365 apps on their device.
* Convert all the Windows 10 Pro devices to Windows 10 Enterprise E5.
* Configure Azure AD Connect to sync the Montreal Users OU and the Seattle Users OU.