Final answer:
Using a percentile ranking system is the most effective way to compare student test grades, as it relates individual scores to the larger group and indicates relative performance.
Step-by-step explanation:
To determine how students' test grades compare to each other, among the presented options, using a percentile ranking system would be most helpful. This approach places each student in the context of the overall performance of the group. Percentile rankings relate individual scores to the larger group, providing a clear comparison of how one student's performance stacks up against their peers.
For example, a student scoring in the 80th percentile in math means they scored better than 80% of their classmates, giving a clear indication of their relative performance. It's more informative than just ranking students, which does not quantify how much better one student's performance is over another's, or calculating the average, which does not differentiate individual performance. Counting the number of students who passed lacks granularity and does not reflect how well students performed beyond the passing threshold.