Will the bad grade in a proposed studied subject be a red flag in my application? I am currently doing final year project on a subject which I did not have a very good grade(I took three courses in this subject with grade A-, A and B+, only top 5-10% can earn a grade of A and A+). I am quite interested in it and plan to continue in this subject in graduate school. Will this grade have bad effect for my application? Can I indicate my interest clearly in my PS given that my grade is not perfect?
I don't believe there is a serious stigma associated with an undergraduate getting a B+ in a graduate-level course. It is generally understood that undergraduates taking true graduate-level work (with graduate-level course numbers, etc.) are taking exceptionally advanced subjects, relative to their own preparation. Therefore, it is entirely understandable that you might have an A-, B+, or even a B in a graduate-level subject without it having a strong impact on your chances for graduate-school admissions. Exceptionally weak performance (corresponding to "failing" grades—usually C+ or lower) would be an exception to this, but I see no reason here why you should worry too much.