A Layer 3 capable switch is designed to perform routing functions based on logical addressing, and therefore can bypass the need for a separate router within a small to medium-sized business network.
The correct answer is true because Layer 3 switches are designed to perform both switching and routing. They make routing decisions using IP addresses, which are logical addresses, rather than only MAC addresses—that is the function of a traditional Layer 2 switch. In many small to medium-sized networks, a Layer 3 switch can perform the necessary routing functions without the need for a separate router, consolidating two roles into a single device for efficiency and cost-effectiveness.