Grade, according to the PMP Study Guide, “is a category or rank given to entities having the same functional use but different technical characteristics.” 1 is incorrect. Grade and perfection may seem related, but a high grade of a component may still have multiple imperfections. 3 is incorrect because the products being measured for grade have the same functionality, but different characteristics. Consider travel, where travelers have coach, business class, and first class. 4 is incorrect. The customer has input to the quality and desire for a particular grade of the component, but does not determine what the grade may be.