Final answer:
The ability in question is called decoding, which is the process of interpreting written words and using context clues to understand missing information, such as a letter in a word. The correct option is 1.
Step-by-step explanation:
The ability to identify a word with a missing letter based on the context of the sentence can be described as decoding. Decoding is the process of interpreting written words into their spoken equivalents, which includes using context clues to fill in missing information such as a missing letter in a word.
The other options - encoding, deciphering, and translating - represent different aspects of language processing.
Encoding involves the production of written or spoken language, while deciphering usually refers to interpreting a difficult-to-understand message or code.
Translating is the process of converting text from one language to another. Therefore, based on the context provided, when you're reading a sentence and can understand a word even with a missing letter, you are using decoding skills. The correct option is 1.