From Quora: "Why did the College Board used to count wrong answers against you?"

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The process where “wrong answers count[ed] against you” was called a “guessing penalty.” The idea was, with five possible answers (there were 5 choices before the “new” SAT of 2016 to the present) if you lost 1/4 a point for every wrong answer, you wouldn’t gain net points by guessing.


The idea worked as follows. Let’s assume you took SAT sometime before 2016, but you were completely ignorant as to the correct answer to any of the questions, so you guessed blindly. You would gain 1 point for every answer you guessed correctly, but lose 1/4 of a point you already won, rather than simply not getting any points for answer you answered incorrectly. Guessing randomly, you’d get 1/5 of the answers right, and 4/5 of them wrong. I’m speaking generally. I know someone COULD guess all the right answers, and someone else could guess and get NONE of the right answers. On average, people who guess will get 1/5 right, and 4/5 wrong. If you lose 1/4 of a point for every wrong answer, you end up losing (1/4) * 4, or 1, points for every 5 “blind” guesses you make. If you gain 1 point for every 1 out every 5 guesses, your 1 point is cancelled out by the 1 point you lose for guessing 4 questions wrongly.


So the idea was people who just guessed blindly wouldn’t be likely to gain any “unearned” points by guessing. However, as even the College Board put on their SAT test booklets, it was to a test-takers advantage to guess if, and only if, the test-taker could eliminate at least one obviously wrong answer. For example, a math problem answer choice that estimates a probability as less than zero or greater than one would be an obviously wrong choice, and could be eliminated. That would work because then then chance of guessing correctly would be 1/4, and the chance of guessing incorrectly would be 3/4. So there would be a 1/4 chance of getting 1 point, and 3/4 chance of losing 1/4 point.


Multiplying the 1/4 chance of a 1 point gain, we expect can a gain of 1/4 of a point for each guess where one wrong answer was eliminated. Multiplying the 3/4 chance of a 1/4 point loss, we expect can a loss of 3/16 of a point for every guess where one wrong answer as been eliminated. So, suddenly, for the same 5 guesses, we should expect 5/4 points gained, and 15/16 of a point lost. That’s a gain of 5/4 = 20/16, minus 15/16 points lost, which leaves us with a net gain of 5/16 of a point.


So, if someone guessed 16 times, but was able to eliminate only one answer for each problem, that person, on average, would gain 5 “unearned” points, which actually fair, since the kid who’s at least able to tell ONE answer is obviously wrong deserves SOME credit for that, especially if the kid can do that for multiple problems.

But SAT changed the system to make it like the ACT’s system (only four answer choices per problem, and no guessing penalty). Is that better? I don’t know, but at least it will make people who would have been too nervous about the guessing penalty to make educated guesses more likely to make at least TRY to guess the right answers. And it’s not as though the people who try to randomly guess all the answers will get very far - either they’ll get low scores, or their scores will be flagged as anomalous (i.e. unexpected, like say, a D-average student getting a perfect 1600 on the SAT) and they may to retake the test, go to arbitration with the College Board, etc.
Hope this helps - sorry about the long-winded explanation, but not sorry enough to delete it. :-)