Which statement about data classification best describes its purpose?

• A. It reduces the need for password policies.
• B. It inhibits sharing of data entirely.
• C. It helps assign appropriate viewing, editing, and sharing rules based on data value and sensitivity.
• D. It eliminates the risk of all data breaches.

Answer: (C)

Data classification labels data by its sensitivity and value, which then drives who can view, edit, or share it and under what conditions. The purpose is to attach viewing, editing, and sharing rights to those labels so access is granted only to people with a legitimate need and in the appropriate manner. This creates a practical framework for applying least-privilege access, proper handling, and secure transmission based on how sensitive the data is. While other controls like password policies and breach protections are important, classification itself is about setting those rules according to data value and sensitivity, not about eliminating all risk or restricting sharing indiscriminately.