A colleague demonstrated drag and drop questions in HFCOnline on Friday. Someone asked if you can include math in the answer choices. The presenter thought not. I can confirm that you cannot.
If you try LaTeX the answer just shows at the LaTeX code.
If you try MathML you just get an error message.
The error message is useful though in that it shows that superscripts and subscripts are possible- just nothing more sophisticated.
Matching questions also did not work. The MathML did not generate an error but it rendered on a single line. The integral appeared. Bounds came next with no spacing or punctuation. Grouping symbols were ignored and exponents were not superscripts. The requirement for matching answers to be rendered as a single line in a pull-down menu makes that format also ineffective for displaying complex math.
Obviously you can set up multiple, multiple-choice questions because the distractors are allowed to have mark up. It is just more cumbersome for the student and you lose the chance to help them make the connection between the methods as easily.