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Question:

Tyler needed to pass his last test to graduate on time. When the grades were returned, he was delighted to find that he had passed by the skin of his teeth. What kind of grade did Tyler get?

A He passed by a very small margin.
Explaination

To pass "by the skin of your teeth" means to pass by a very small margin. The other answers don't match the meaning of this idiom and are, therefore, wrong.