Which of the following assumptions does Groh make? A) Inflation can o

QUESTION

Which of the following assumptions does Groh make?

A) Inflation can outpace any interest rate.
B) Given enough time, any stock will eventually go up in value.
C) The riskier the investment, the more value it will have over a long period of time.
D) The more stocks invested in, the higher their value will be.
E) The stock market overall will experience net growth over time.

ANSWER

Answer: E
Explanation: E) Groh argues that holding many stocks over a long time will ensure growth in value, which assumes that the stock market as a whole grows in value over time: if it did not, then holding several stocks over a long period of time may not be sufficient to ensure growth in value. Groh does not assume that interest rates will always be lower than inflation (Choice A), that any stock will increase in value given enough time (Choice B), that risk in investment correlates with growth in value over time (Choice C), or that investing in more stocks ensures that they will all increase in value (Choice D).