Grenada is located in
This one is a favourite in exams. In Islands, whenever you see Grenada is located in, the answer is Caribbean Sea. I have seen students get it right just by remembering this one line. So do not overthink it. Learn this pair and you are good.
Ref: [Goa PSC (Pre) 2019 Uttarakhand PCS (Pre) 2012] | NCERT Geography textbooks and Goh Cheng Leong, Certificate Physical and Human Geography, discuss Islands and explain the geographical concepts and processes that support the correct answer for this question.