Final answer:
The correct hypothesis is the Signal sequence cleavage model (C), which is a part of the broader Signal Hypothesis, stating that a signal peptide directs proteins to the ER and is cleaved off later.
Step-by-step explanation:
The hypothesis created after observing that proteins in the ER were larger than proteins in their native location is known as C) Signal sequence cleavage model. This hypothesis is part of the broader Signal Hypothesis, which was formulated by Gunther Blobel and his colleagues. According to the Signal Hypothesis, secretory proteins have a short amino-terminal signal peptide that directs the growing polypeptide to the rough endoplasmic reticulum (RER). The signal peptide is cleaved by a signal peptidase as the polypeptide enters the RER, which accounts for the difference in size between the ER and native proteins.