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All tests (along with papers, homeworks, etc) are governed by the honor code, meaning that you pledge not to cheat on them. You write a pledge on the bottom "On my honor, I have neither given nor received any unauthorized aid on this ______." From my time at Rice, at least among the students I know, people actually follow this.
Because of this, a lot of our exams are takehome. However, a good number of professors like to have scheduled or in class exams, just to manage the logistics of having everyone turn them in more effectively, because they like to be available for any clarifications, or because the exam somehow requires their presence (such as my Arabic exams which included listening sections). However, in pretty much all of the exams I've taken recently, the professor has not actually stayed in the room to proctor the exam, but instead pops his head in every 20 minutes or so to make sure that there are no questions.
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