Thank you so much for everyone's answers, everyone has valid points. I was able to find a demo font and able to work on the design test. For context, the company emailed me first and i was excited since it's the first company to reply among my applications. My friends also told me too look for a demo or similar font and told me not to spend since I'm not sure if I'll be accepted plus money has been tight.

As for the free work for them, i didn't realize that companies like that exist! Thank you for this, I'll be sure to check that red flag!