The Gradebook Setup page determines how your individual grade items make up a student’s entire course grade. It can do so using various aggregation methods, which you can read about in depth on Moodle’s documentation site.
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Grade Item - Simply put, something your students will do to receive points. This could be a presentation, a participation grade, a field trip, or anything else. Grade Items are different from Activities created on the course page, students cannot interact with them. If you want them to submit and Assignment, take a Quiz, receive a grade for Attendance, participate in a Discussion Forum, complete a Lesson or Workshop, please read this our article about Moodle Activities.
Category - A bucket containing Grade Items and graded Activities. Categories help you structure your course gradebook.
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This method weights grade items automatically based on their max grade. For example, if Homework A is worth 50 points and Homework B is worth 100 points, then Homework A is worth twice as much as Homework B. Note that the course total is still 100, even though the total of the items is 150. Mean of grades means that the course total will be scaled to whatever you set it to, 100 by default. This method supports extra credit.
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This method allows you to set custom weights, regardless of max grade. Note the appearance of the Weights column using this method. If both Homework A and Homework B are worth 100 points, you can control the relative importance of each item by entering proportional values in the box next to each item. Here, Homework A is worth 60% and Homework B is worth 40% of the course total.
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Natural grading is a raw sum of points. If Homework A is worth 50 points and Homework B is worth 100 points, then the course total is 150 and cannot be rescaled. This method supports extra credit.
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