When the lowest quiz is dropped , does that drop quiz that was never attempted (0 grade) or does it drop just the quizzes that were attempted?
Only if you also selected NO on this option when editing the formula for grade center calculations.
Calculate as Running Total
It only drops the lowest of quizzes (or whatever is in the category) with grades.
Since "No" in the Calculate as Running Total automatically considers anything not (or not yet) attempted to have a grade of zero (0)--that setting will automatically drop work not completed/graded. But many instructors and students don't like that; "That's the hardest I've ever worked for an F" came from a student who had 100% on everything at the midpoint of the course, and thus the calculated grade showed she had 50% because the second half of the assignments weren't done yet.
Two more caveats:
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