Conclusion: Swimming in schools is safer for small fish, because there is high chance that other small fish might distract a shark's attention.

(A) Sharks live primarily on a diet of small fish.
-- It is said in the argument that shark will catch almost anything. So this assumption is not necessary. Eliminate A.
(B) Sharks do not eat an entire school of fish at one time.
** If sharks do eat entire school at once, then small fish's chance of survival goes does by being part of a large group. So this assumption is necessary. Keep B.
(C) The sheer number of fish in a school prevents sharks from attacking.
-- Argument only talks about the distracting shark and not threatening shark with large numbers. For the conclusion made with given premises this assumption is not needed. Eliminate C.
(D) Sharks are the main danger to small fish in the open ocean.
-- Sharks catch almost anything is already given and this statement doesn't add anything relevant to arrive at the given conclusion. Eliminate D.
(E) Small fish are able to sense when they are being spotted by sharks.
-- If they can spot and escape, then the conclusion doesn't matter. If they can spot and not escape, then it doesn't explain anything extra needed to arrive at the conclusion. Eliminate E.

Answer: B

The answer should be B. In the first go, A, C and D are extreme or irrelevant and thus can be eliminated. Negation of A breaks the conclusion, i.e., if the school gets eaten all at once then small fishes gain no advantage by being part of a school.

E speaks of small fishes' escape strategy which is a classic trap answer.