WGU C724 Information Systems
Management Exam 2025 – Verified
Questions with Correct Answers and
Detailed Explanations
Question 1
Which component of an information system is responsible for transforming raw data into
meaningful information?
A. Hardware
B. Software
C. Networks
D. People
Correct Answer: B. Software
Rationale: Software consists of programs and applications that process raw data into meaningful
information, enabling analysis and decision-making. Hardware provides the physical
infrastructure, networks facilitate connectivity, and people interact with the system, but only
software directly transforms data.
Question 2
What is the primary purpose of an Executive Information System (EIS)?
A. Process daily transactions
B. Support strategic decision-making for executives
C. Manage supply chain logistics
D. Automate payroll processing
Correct Answer: B. Support strategic decision-making for executives
Rationale: An EIS is designed to provide senior executives with summarized internal and
external data for strategic planning and trend analysis. Transaction processing systems handle
daily transactions, supply chain systems manage logistics, and payroll systems automate payroll,
not strategic decisions.
Question 3
,A company implements a Customer Relationship Management (CRM) system. What is the
primary benefit of this system?
A. Increased data redundancy
B. Improved customer interaction and retention
C. Reduced network security
D. Automated financial reporting
Correct Answer: B. Improved customer interaction and retention
Rationale: CRM systems manage customer data and interactions to enhance relationships,
improve satisfaction, and increase retention. They do not increase redundancy, reduce security,
or focus on financial reporting.
Question 4
Which database model organizes data into tables with rows and columns, linked by keys?
A. Hierarchical
B. Network
C. Relational
D. Flat-file
Correct Answer: C. Relational
Rationale: The relational database model organizes data into tables (relations) with rows
(records) and columns (attributes), linked by primary and foreign keys for efficient data retrieval.
Hierarchical and network models use tree or graph structures, and flat-file models lack relational
links.
Question 5
A company is experiencing delays in data retrieval due to poor database design. Which process
can improve data accuracy and efficiency?
A. Data redundancy
B. Data normalization
C. Data encryption
D. Data archiving
Correct Answer: B. Data normalization
Rationale: Data normalization organizes data to eliminate redundancy and ensure consistency,
improving retrieval efficiency. Redundancy increases storage needs, encryption secures data, and
archiving stores data for long-term use, not addressing design issues.
, Question 6
What is the primary role of a Chief Information Officer (CIO)?
A. Manage daily IT operations
B. Align IT strategy with business goals
C. Develop software applications
D. Monitor network performance
Correct Answer: B. Align IT strategy with business goals
Rationale: The CIO is responsible for strategic planning, ensuring IT initiatives support
organizational objectives. Daily operations, software development, and network monitoring are
handled by other IT roles, such as IT managers or network administrators.
Question 7
Which phase of the System Development Life Cycle (SDLC) involves defining project goals and
feasibility?
A. Planning
B. Analysis
C. Design
D. Implementation
Correct Answer: A. Planning
Rationale: The planning phase of the SDLC identifies project goals, scope, and feasibility,
including cost-benefit analysis. Analysis gathers requirements, design creates system
specifications, and implementation deploys the system.
Question 8
A company uses data mining to identify customer purchasing patterns. Which outcome is most
associated with this process?
A. Discovering associations
B. Encrypting sensitive data
C. Reducing network latency
D. Automating payroll
Correct Answer: A. Discovering associations
Rationale: Data mining analyzes large datasets to uncover patterns, such as associations between
customer purchases (e.g., buying socks with sneakers). It does not focus on encryption, latency,
or payroll automation.
Management Exam 2025 – Verified
Questions with Correct Answers and
Detailed Explanations
Question 1
Which component of an information system is responsible for transforming raw data into
meaningful information?
A. Hardware
B. Software
C. Networks
D. People
Correct Answer: B. Software
Rationale: Software consists of programs and applications that process raw data into meaningful
information, enabling analysis and decision-making. Hardware provides the physical
infrastructure, networks facilitate connectivity, and people interact with the system, but only
software directly transforms data.
Question 2
What is the primary purpose of an Executive Information System (EIS)?
A. Process daily transactions
B. Support strategic decision-making for executives
C. Manage supply chain logistics
D. Automate payroll processing
Correct Answer: B. Support strategic decision-making for executives
Rationale: An EIS is designed to provide senior executives with summarized internal and
external data for strategic planning and trend analysis. Transaction processing systems handle
daily transactions, supply chain systems manage logistics, and payroll systems automate payroll,
not strategic decisions.
Question 3
,A company implements a Customer Relationship Management (CRM) system. What is the
primary benefit of this system?
A. Increased data redundancy
B. Improved customer interaction and retention
C. Reduced network security
D. Automated financial reporting
Correct Answer: B. Improved customer interaction and retention
Rationale: CRM systems manage customer data and interactions to enhance relationships,
improve satisfaction, and increase retention. They do not increase redundancy, reduce security,
or focus on financial reporting.
Question 4
Which database model organizes data into tables with rows and columns, linked by keys?
A. Hierarchical
B. Network
C. Relational
D. Flat-file
Correct Answer: C. Relational
Rationale: The relational database model organizes data into tables (relations) with rows
(records) and columns (attributes), linked by primary and foreign keys for efficient data retrieval.
Hierarchical and network models use tree or graph structures, and flat-file models lack relational
links.
Question 5
A company is experiencing delays in data retrieval due to poor database design. Which process
can improve data accuracy and efficiency?
A. Data redundancy
B. Data normalization
C. Data encryption
D. Data archiving
Correct Answer: B. Data normalization
Rationale: Data normalization organizes data to eliminate redundancy and ensure consistency,
improving retrieval efficiency. Redundancy increases storage needs, encryption secures data, and
archiving stores data for long-term use, not addressing design issues.
, Question 6
What is the primary role of a Chief Information Officer (CIO)?
A. Manage daily IT operations
B. Align IT strategy with business goals
C. Develop software applications
D. Monitor network performance
Correct Answer: B. Align IT strategy with business goals
Rationale: The CIO is responsible for strategic planning, ensuring IT initiatives support
organizational objectives. Daily operations, software development, and network monitoring are
handled by other IT roles, such as IT managers or network administrators.
Question 7
Which phase of the System Development Life Cycle (SDLC) involves defining project goals and
feasibility?
A. Planning
B. Analysis
C. Design
D. Implementation
Correct Answer: A. Planning
Rationale: The planning phase of the SDLC identifies project goals, scope, and feasibility,
including cost-benefit analysis. Analysis gathers requirements, design creates system
specifications, and implementation deploys the system.
Question 8
A company uses data mining to identify customer purchasing patterns. Which outcome is most
associated with this process?
A. Discovering associations
B. Encrypting sensitive data
C. Reducing network latency
D. Automating payroll
Correct Answer: A. Discovering associations
Rationale: Data mining analyzes large datasets to uncover patterns, such as associations between
customer purchases (e.g., buying socks with sneakers). It does not focus on encryption, latency,
or payroll automation.
