The proposition that the optimal number of options in a multiple choice test item is three was examined. The concept of functional distractor, a plausible wrong answer that is negatively discriminating when total test performance is the criterion, is discussed. Three distinct groups of achievers (high, middle, and low) on a national standardized achievement test for physicians were identified. The number of functional distractors was identified for each sample condition and each item. Results suggest, as have theoretical analyses, that more functional distractors are desirable. However, with higher achieving students the number of functional distractors, and consequently the number of options, had no effect. The time and effort devoted to additional option item development is probably not worth the gains in item discrimination and reliability for high and middle achieving examinees. The three-option format is efficient to construct, and it results in better domain-referenced measures of achievement. (SLD)