When you answer, you have choices as to what you can assert:
Admissions/concessions
Denials (or the older term: traverses)
Affirmative Defenses (or the older term: pleas in confession and avoidance)
In your answer, you can plead in the alternative with multiple sets of admissions, denials, and affirmative defenses.
For each allegation, you go through and say either "it happened," "didn't happen," or "I don't know."
If you don't respond to an allegation, then it's deemed to be admitted to.
All of these are subject to Rule 11 sanctions; however, before discovery, you don't know certain things—especially if it's the first lawsuit on a matter—so judges are not predisposed to sanction attorneys.