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Grey Box testing is a technique to test the application with limited knowledge of the internal workings of an application. In software testing, the term the more you know the better carries a lot of weight when testing an application.
Mastering the domain of a system always gives the tester an edge over someone with limited domain knowledge. Unlike black box testing, where the tester only tests the application's user interface, in grey box testing, the tester has access to design documents and the database. Having this knowledge, the tester is able to better prepare test data and test scenarios when making the test plan.
Offers combined benefits of black box and white box testing wherever possible.
Grey box testers don't rely on the source code; instead they rely on interface definition and functional specifications.
Based on the limited information available, a grey box tester can design excellent test scenarios especially around communication protocols and data type handling.
The test is done from the point of view of the user and not the designer.
Since the access to source code is not available, the ability to go over the code and test coverage is limited.
The tests can be redundant if the software designer has already run a test case.
Testing every possible input stream is unrealistic because it would take an unreasonable amount of time; therefore, many program paths will go untested.