The _______ was eating in the field. 

The correct answer is: Deer

The correct answer is "Deer".
All the three words given in the above example are homonyms because their pronunciation is more or less similar to one another, though they have distinct meaning. "Dare" means to have courage, "deer" means a herbivore animal which runs very fast, and "dear" means favorite. Since the given sentence wants the name of a grass eater to complete the meaning, the only possible answer could be the name of a herbivore creature. So, "deer" is the correct answer.