Comprehensive and Detailed 100to 150 words of Explanation From AWS Certified Security – Specialty topics:

STS session policies are designed to reduce permissions for a specific assumed-role session. AWS documentation states that the resulting session permissions are the intersection of the role’s identity-based policy and the session policy, and that session policies cannot grant more permissions than the role already allows. Therefore, the cross-account role must have the full set of permissions needed across incident types, and each incident response session can be narrowed dynamically with a session policy. Option C is impossible because a session policy cannot add permissions to an otherwise permissionless role. Permissions boundaries are used to limit maximum permissions for identities, not dynamically tailor individual STS sessions. Creating roles per incident with Lambda is unnecessary operational overhead.

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