Over a certain time period, did the number of shares of stock in Ruth's portfolio increase
(1) Over the time period, the ratio of the number of shares of stock to the toal number of shares of stocks and bonds in Ruth's portfolio increased.
(2) Over the time period, the total number of shares of stocks and bonds in Ruth's portfolio increased.
C for me too..
(1) the increase in the ratio could also have resulted from Ruth selling all her bonds, and not doing anything to stocks
(2) the increase in the total number of shares and bonds could have resulted from ruth only buying more bonds, which increases this number
Combined: Ruths ratio of shares to the total portfolio increased. And the total number of shares of stocks and bonds increased. So she increased her amount of one or both.
To prove the stem wrong (i.e. to find a situation where (1) and (2) occured but the number of shares did not increase), the number of stocks must be kept constant. If this is constant, and the ratio of (1) increased, then the only way to compensate for this is to sell bonds. but from (1) we know that this was not the case....
kinda confusing I know, that's how my brain works