What defines IAM policy in AWS?

The IAM (Identity and Access Management) policy in AWS is a document that defines permissions for actions on AWS resources. It specifies what actions are allowed or denied for a user, group, or role within AWS. This allows for detailed access control to AWS services, resources, and actions, enabling organizations to establish security boundaries and manage who can access their cloud resources and what they can do with them.

A correctly structured IAM policy promotes security best practices by granting only the necessary permissions needed for users to perform their job functions while reducing the risk of unauthorized access or actions being performed on critical resources. Therefore, understanding IAM policies is crucial for effective security and resource management in AWS.

Other options provided do not accurately represent what an IAM policy is. For example, documents outlining pricing or deploying resources relate to billing or infrastructure management rather than permission management. Additionally, tools for monitoring server performance are relevant to operations and performance management but do not pertain to IAM policies at all.