Explanation:
Box 1: Remove the public IP address from VM1
If the Public IP on VM1 is set to Dynamic, that means it is a Public IP with Basic SKU because Public IPs with Standard SKU have Static assignments by default, that cannot be changed. We cannot associate Basic SKUs IPs with Standard SKUs LBs. One cannot create a backend SLB pool if the VM to be associated has a Public IP. For Private IP it doesn't matter weather it is dynamic or static, still we can add the such VM into the SLB backend pool.
Box 2: Create and configure an NSG
Standard Load Balancer is built on the zero trust network security model at its core. Standard Load Balancer secure by default and is part of your virtual network. The virtual network is a private and isolated network.
This means Standard Load Balancers and Standard Public IP addresses are closed to inbound flows unless opened by Network Security Groups. NSGs are used to explicitly permit allowed traffic. If you do not have an NSG on a subnet or NIC of your virtual machine resource, traffic is not allowed to reach this resource. To learn more about NSGs and how to apply them for your scenario, see Network Security Groups. Basic Load Balancer is open to the internet by default.

Reference:
https://docs.microsoft.com/en-us/azure/load-balancer/quickstart-load-balancer-standard-public-portal
https://docs.microsoft.com/en-us/azure/load-balancer/load-balancer-overview

B: You can gradually roll out Seamless SSO to your users. You start by adding the following Azure AD URL to all or selected users' Intranet zone settings by using Group Policy in Active Directory: https://autologon.
microsoftazuread-sso.com
E: Seamless SSO works with any method of cloud authentication - Password Hash Synchronization or Pass- through Authentication, and can be enabled via Azure AD Connect.
References:
https://docs.microsoft.com/en-us/azure/active-directory/hybrid/how-to-connect-sso-quick-start

Placement Groups is a capability to achieve co-location of your Azure Infrastructure as a Service (IaaS) resources and low network latency among them, for improved application performance.
Azure proximity placement groups represent a new logical grouping capability for your Azure Virtual Machines, which in turn is used as a deployment constraint when selecting where to place your virtual machines. In fact, when you assign your virtual machines to a proximity placement group, the virtual machines are placed in the same data center, resulting in lower and deterministic latency for your applications.
The VMSS should share the same region, even it should be the same zone as proximity groups are located in the same data center. Accordingly, it should be proximity 2 only.
Reference:
https://azure.microsoft.com/en-us/blog/introducing-proximity-placement-groups

Explanation:

This reference architecture shows how to deploy VMs and a virtual network configured for an N-tier application, using SQL Server on Windows for the data tier.

Scenario: You have a public-facing application named App1. App1 is comprised of the following three tiers:
A SQL database
A web front end
A processing middle tier
Each tier is comprised of five virtual machines. Users access the web front end by using HTTPS only.
Technical requirements include:
Move all the virtual machines for App1 to Azure.
Minimize the number of open ports between the App1 tiers.
References: https://docs.microsoft.com/en-us/azure/architecture/reference-architectures/n-tier/n-tier-sql-server