To determine the correlation between unit test performance and retention on final examinations, scores of 68 secondary level teaching candidates enrolled in a general methods course were studied. Unit tests were administered frequently to determine student achievement of the 38 course objectives. Two retests per student were allowed, with retesting focusing only on those objectives not achieved. The 83-item final examination was categorized with respect to the 10 instructional units in the course. Results indicated a correlation of .406 between unit test performance (expressed as objectives achieved) and retention scores. Correlation coefficients between unit objectives achieved (both total number and number achieved on the initial attempt) and the retention test subscore for that unit were also positive. In conclusion, empirical evidence supported the assignment of grade credit on the basis of attainment of objectives during instruction; however,the final examination should also contribute to the course grade. Such grading policy favors the Personalized System of Instruction. The correlation values are not so great as to encourage the Mastery Learning approach which suggests that grades can be assigned entirely by final exam performance. (CP)