If someone logs in with the system password the classmates yearbook profile picture doesn't appear. Is this a normal function of the site or have I missed something in the security settings.

Under your Manage Classmates > Enter/Edit Classmates > at the top of the page there are some settings that you have selected:

Show Admin-entered Classmate Profile details prior to Classmate joining the site.
   Show only to logged-in Classmates

This controls the visibility of the profiles and the yearbook photos.

If I logout and click on "Classmates" I get a login screen. If I login with the system password I can look at a profile but the yearbook picture isn't there. If I login as a guest account the pictures are there. I tried the "Allow only logged-in Classmates to view Yearbook Photos" both ways and it didn't make any difference.

Logging in with the SYSTEM PASSWORD isn't really logging in. You cannot see classmate profiles that are protected. For this reason, you shouldn't be treated as a logged in classmate.

You have the "Show only to logged-in Classmates" option selected, so since they only entered the SYSTEM PASSWORD, they aren't logged in, so they shouldn't see the photos.

Since I tried "Show only to logged-in Classmates" both ways I'm assuming there is no way someone logged in with the System Password" will be able to see the yearbook photo even tho they can see photos that classmates have uploaded to their profile page. Is this correct?

We are reviewing this to see if there is a good solution.