Yes, students can retake tests. Teachers will be able to see their score and answers for each attempt.
When a student finishes a test, they can click this button to see all of their answers and review their work:
They can then attempt the test again by clicking this button:
If a student wants to retake a test they have completed previously, they can also get to this page by clicking on the completed test from their My Educake page or from their View Test Results page in their course.
This article has more information on what teachers can see when students retake tests.