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A test environment consists of a server/computer on which a tester runs their tests. It is different from a development machine and tries to represent the actual hardware on which the software will run; once it’s in production.
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Whenever a new build of the software is released, the tester updates the test environment with the latest build and runs the regression tests suite. Once it passes, the tester moves on to testing new functionality.
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You are right! 
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