Explanation:
Box 1: Create a system-assigned Managed Identities for Azure resource
The managed identities for Azure resources feature in Azure Active Directory (Azure AD) feature provides Azure services with an automatically managed identity in Azure AD. You can use the identity to authenticate to any service that supports Azure AD authentication, including Key Vault, without any credentials in your code.
A system-assigned managed identity is enabled directly on an Azure service instance. When the identity is enabled, Azure creates an identity for the instance in the Azure AD tenant that's trusted by the subscription of the instance. After the identity is created, the credentials are provisioned onto the instance.
Box 2: An Azure Instance Metadata Service Identity
See step 3 and 5 below.
How a system-assigned managed identity works with an Azure VM
1. Azure Resource Manager receives a request to enable the system-assigned managed identity on a VM.
2. Azure Resource Manager creates a service principal in Azure AD for the identity of the VM. The service principal is created in the Azure AD tenant that's trusted by the subscription.
3. Azure Resource Manager configures the identity on the VM by updating the Azure Instance Metadata Service identity endpoint with the service principal client ID and certificate.
4. After the VM has an identity, use the service principal information to grant the VM access to Azure resources. To call Azure Resource Manager, use role-based access control (RBAC) in Azure AD to assign the appropriate role to the VM service principal. To call Key Vault, grant your code access to the specific secret or key in Key Vault.
5. Your code that's running on the VM can request a token from the Azure Instance Metadata service endpoint, accessible only from within the VM Reference:
https://docs.microsoft.com/en-us/azure/active-directory/managed-identities-azure-resources/overview

Instead, you should deploy two Azure virtual machines to two Azure regions, and you create a Traffic Manager profile.

Topic 2, Contoso, Ltd
Information Security Requirement
The IT security team wants to ensure that identity management n performed by using Active Directory. Password hashes must be stored on premises only.
Access to all business-critical systems must rely on Active Directory credentials. Any suspicious authentication attempts must trigger multi-factor authentication prompt automatically Legitimate users must be able to authenticate successfully by using multi-factor authentication.
Planned Changes
Contoso plans to implement the following changes:
* Migrate the payment processing system to Azure.
* Migrate the historical transaction data to Azure Cosmos DB to address the performance issues.
Migration Requirements
Contoso identifies the following general migration requirements:
Infrastructure services must remain available if a region or a data center fails. Failover must occur without any administrative intervention
* Whenever possible. Azure managed serves must be used to management overhead
* Whenever possible, costs must be minimized.
Contoso identifies the following requirements for the payment processing system:
* If a data center fails, ensure that the payment processing system remains available without any administrative intervention. The middle-tier and the web front end must continue to operate without any additional configurations-
* If that the number of compute nodes of the from -end and the middle tiers of the payment processing system can increase or decrease automatically based on CPU utilization.
* Ensure that each tier of the payment processing system is subject to a Service level Agreement (SLA) of 9959 percent availability
* Minimize the effort required to modify the middle tier API and the back-end tier of the payment processing system.
* Generate alerts when unauthorized login attempts occur on the middle-tier virtual machines.
* Insure that the payment processing system preserves its current compliance status.
* Host the middle tier of the payment processing system on a virtual machine.
Contoso identifies the following requirements for the historical transaction query system:
* Minimize the use of on-premises infrastructure service.
* Minimize the effort required to modify the .NET web service querying Azure Cosmos DB.
* If a region fails, ensure that the historical transaction query system remains available without any administrative intervention.
Current Issue
The Contoso IT team discovers poor performance of the historical transaction query as the queries frequently cause table scans.
Information Security Requirements
The IT security team wants to ensure that identity management is performed by using Active Directory. Password hashes must be stored on-premises only.
Access to all business-critical systems must rely on Active Directory credentials. Any suspicious authentication attempts must trigger a multi-factor authentication prompt automatically. legitimate users must be able to authenticate successfully by using multi-factor authentication.

Reference:
https://docs.microsoft.com/en-us/azure/app-service/overview-authentication-authorization