Final answer:
A Network Security Group (NSG) does not encrypt traffic; it is used for filtering traffic based on rules. Encryption is handled by other mechanisms such as VPNs or TLS. The statement is false.
Step-by-step explanation:
The statement about a Network Security Group (NSG) encrypting all the network traffic sent from Azure to the Internet is false. An NSG is used to filter network traffic to and from Azure resources within an Azure virtual network. An NSG contains security rules that allow or deny inbound or outbound network traffic based on several parameters, such as source and destination IP addresses, ports, and protocols.
Encryption of network traffic is handled by other mechanisms, like IPsec for Virtual Private Networks (VPNs) or Transport Layer Security (TLS) for secure web traffic. To ensure encryption over the internet, services such as Azure VPN Gateway or customer-managed encryption solutions should be deployed.