1. Yes, it could be two people speaking:
Max: It is going to be fine tomorrow.But, given the choices available, only B. works:
Pat: So it is.
A. So is it. <Question>
B. So it is.
C. So it does. <Action>
D. So does it. <Question>
2. Choice A., even D., but I would have said, "I would have thought you ... ", which isn't even a choice. Agh, modals are tricky without context, and they can differ across dialects.
3. Representatives from the companies indicated that they should go on working together in ________.
A. unity <collocation>
D. partnership <synonym, but can imply 2>
4. The young employee has a(n) ______ quality -- he is totally honest.
B. admirable <I would have picked B. too>
D. approachable <he's very sincere is the meaning I think the examiner was after with 'he is totally honest.'>
5. "The man preparing the documents is the firm's lawyer" has all the following possible meanings EXCEPT
A. the man who has prepared the documents…
B. the man who has been preparing the documents…
C. the man who is preparing the documents…
D. the man who will prepare the documents…
Note, C. is the answer as 'preparing the documents' is a reduce relative clause.