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Loopback Test checks to see if the NIC can transmit and receive data properly. This test is usually applicable to 10Base2 (coax) only, as a BNC TEE with 2 terminations is required. There is no 10BaseT loopback test because you can't terminate at the NIC.
Note: The first two diagnostic routines are performed not connected to the physical network. This prevents faulty NICs from disruptting normal network traffic. The last diagnostic routine is the Echo Server or Network test. Two NICs are required. A known working NIC acts as an Echo Server and the NIC under test is the Echo client. The echo client sends a packet to the echo server who echoes the packet back. This is tested on the network and can be used for any cabling type not just 10Base2 as per the example.
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