We report on the optical characterization of an ultra-high diffraction efficiency grating in 1st order Littrow configuration. The apparatus used was an optical cavity built from the grating under investigation and an additional high reflection mirror. Measurement of the cavity finesse provided precise information about the gratings diffraction efficiency and its optical loss. We measured a finesse of 1580 from which we deduced a diffraction efficiency of (99.635$pm$0.016)% and an overall optical loss due to scattering and absorption of just 0.185 %. Such high quality gratings, including the tool used for their characterization, might apply for future gravitational wave detectors. For example the demonstrated cavity itself presents an all-reflective, low-loss Fabry-Perot resonator that might replace conventional arm cavities in advanced high power Michelson interferometers.
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