This paper reports a study which compared the performance of different groups of students and doctors on identical and equivalent tests set in an objective-type format and in a free-response format. The tests were designed to ensure that the content was relevant to clinical practice at the hospital intern level. In all test situations candidates' scores were significantly higher in the objective tests than in the free-response tests. This difference was greater for the more junior and less competent students than for the more competent doctors. The cueing effect of the options was thought to be the main factor responsible for the difference in performance. The results of a questionnaire survey demonstrated that students were aware of the deficiencies in multiple-choice tests. A large majority of the students believed that the free-response tests gave a more accurate assessment of their clinical ability. It was found that in these tests, aimed at measuring aspects of clinical competence, multiple-choice questions appeared to overestimate the candidate's ability to an extent that made them less suitable than free-response questions for this purpose. It was also found that free-response tests, of the type used in this study, provide a suitable alternative to multiple-choice tests for use in the written section of clinical examinations. It was concluded that the written component of the final examination in the medical course should have a preponderance of free-response items over multiple-choice items.