To the best of my knowledge, you are allowed to use manoeuvering board sheets in the USCG exam and, as previously mentioned, they come complete with the directions on them. It really is the easiest, most fool-proof way to do the problem. They can also be used for small area plotting sheet construction used in celestial navigation. A word to the wise on USCG exam questions (I've passed four, not counting renewals). The multiple choice answers have accounted for the, "oh good, it's multiple choice if I'm close the answer will be right there" factor. The incorrect answers are the result of the most common errors made in answering the question and, as such, will be exactly wrong. Clever people those CGs. Good luck and remember to read the question. I taught the navigation portion of the license prep course at the USMMA and one of the most common complaints was, "oh, I thought they meant something different". The wording must be read and interpreted exactly as written and not as to what you "think" it's trying to say. (I know that doesn't make sense to those who haven't been there-just think in terms of a double trick question!) If you are in doubt about the accuracy of the wording of the question, you can protest it in writing, but the protest writing comes out of your exam time. Don't waste time asking the proctor for an explanation of the question, he is generally a petty officer with little or no knowledge of the exam itself-he's just there to pass out the papers and monitor.
Just nit-picking, but relative bearings are not marked True, Magnetic, Compass or otherwise. Relative bearings are only related to where the bow is and the bow doesn't change regardless of what choose to call the course you are on.
As btrayfors said, it is of utmost importance to use these navigational terms with rigorous exactitude. Mis-speaking can lead to mis-construing, and that can ruin your day at sea. As Robert Ganier, who has also taught navigation, will tell you-the devil is in the details. Small math mistakes ruin the other 99% done correctly. A "passing" grade on the navigation portion of the exam is 90% on the principle that the correct answer is right where the ship is located and an incorrect answer is, well.....aground.
Allowing for set and drift does not detract from the relevance of the question. We always have to factor that in, usually as we go, and it doesn't change the fact that we do have to set an initial course. I suppose one could intercept Bishop Rock starting with even a westerly heading, but something in the northeastern quadrant might be less time consuming.