It's impossible to tell from listening whether you want the letter (υ), or the name (υψιλον), so both should be marked correct, like Sie (formal address) and sie (3rd person plural) in German, for example. I've also reported this, since I encounter this problem every time I have to refresh this lesson and it's getting very annoying.
For grammatical endings, you can usually tell from grammar (e.g. something sounding like "i" at the end of a word will usually be -η if feminine singular, -ι if neuter singular, and -οι if masculine plural).
But in the word stem itself, you pretty much have to memorise whether it's η υ ι οι ει*. A bit like "ee" vs. "ea" in English.
Sometimes knowing English helps, e.g. κοιμητήριο "cemetery" can't have iotas in the first three syllables because English uses -e- in those syllables rather than -i-.
The same with ε/αι and ο/ω, which you also have to memorise, in general.
Sometimes even both are possible in loanwords, e.g. τρένο/τραίνο for "train".
* Theoretically, the sound "i" can also be spelled υι, but there are only a couple of words with that sound spelled that way in modern Greek, none of them particularly common unless you're talking about harpies or adoption.
But κοιμητήριο does have an iota in the first syllable. The English “cemetery” has come through the Latin transliteration of the Greek, where the first syllable becomes “coe-”, which in Mediaeval becomes “ce-”. So knowing just English doesn’t really help.
Υ, υ, was still in the Byzantine era pronounced like [ü], the u in French lune or the ü in German über. The old name of the letter was its sound Υ. The Byzantines gave it the name Ύ-ψιλον (ψιλός small, not broad) to differ it from the diphtong οι which then also was pronounced [ü]. Nowadays both are pronouced ee.
It was also the Byzantines who introduced small Greek letters α, β, ... and the small Y became υ.
Then why offer two legitimate options - υ and ύψιλον? Remove one and the problem is solved, at least when using the word bank.
Yeah, nobody else gets it, either, efl! One of DL's biggest "little" glitches is it's set up to accept just a single answer on listening exercises. That's okay, when every word in the exercise has no sound-alikes. But (especially in the infamous alphabet-intro chapter), the landscape is still littered with homophones, driving new learners crazy, as they have been for years. Maybe someday, they'll get fixed/removed. Meanwhile, just try to focus on all the good stuff DL can actually help with, thanks to the hard work of the volunteer moderators.... Best wishes, Paul
This is a very annoying way to get started. I've known the Greek alphabet for 50 years and want to further my knowledge of grammar and enrich my vocabulary, but I can't past these alphabet tests whose questions make no sense and are therefore not valid assessments of alphabet mastery!
The Greek letter Υ, υ is pronounced ee except for the diphtong ΑΥ, αυ which is pronounced af before soundless Greek letters: ναυτιλία (naftileea) = navigation, ναύτης (nafftis) = sailor, καυστικός (kafstikoss) = caustic, burning and av before Gr letters with sound: ναύαρχος (navvarhos)= admiral, μαύρος (mavvros) = black