I took "If in such a circumstance the value of a particular investment" as it was referring to the previous investment discussed (most valuable). How can I avoid or correctly identify if it is referring to a past statement or detail in a passage? I completely understand the reason for the answer being right, but my anticipation and understanding of the stimulus bit me here.
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I think there are two things to note here. First, I want you to be on the lookout for hypotheticals. The test will often give a general principle or statement, and then give us a concrete example or hypothetical that either illustrates it or tweaks it a bit. Second, I think there are clues in the language here. The If is a decent indicator we are moving into a hypothetical, and the fact that we then are told that in such a circumstance makes me think that we are referring to the general scenario of inflation outpacing returns, rather than the specific minimum rate of decline. It also is talking about the value of some particular investment, which does not tell me we are referring to the one with the highest possible return.
