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Click Assessments>Grades, find the grade item you want to delete and click the radio button next to the item. Keep in mind if you see something listed under Association, you will not be able to delete the grade item until you either unassociate it from the item or delete the assignment, quiz, etc. Once that is complete you can delete the item.

Once you have clicked the radio button on the item you want to delete, Click More Actions and Choose Delete

You will now need to click the radio button next to the item you want to delete again. Then Click Delete

You will get a confirmation message and click Delete again