Departmental professors are the best judges of standards within their disciplines. On the one hand, you must remember that this is an undergraduate, not a graduate, thesis, but on the other hand, you should not underestimate the ability of an honors student to produce truly superior work when challenged to do so. When it comes to setting a grade, you will obviously want to consider seriously the judgments of the two readers, but the thesis director is the instructor of record, and ultimately the determination of a grade is your responsibility.
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