Final answer:
The Schachter-Singer two-factor theory indicates that emotions result from c)both physical arousal and cognitive appraisal. This interpretive process combines physiological responses with context to produce the experienced emotion.
Step-by-step explanation:
According to the Schachter-Singer two-factor theory of emotion, emotions involve both physical arousal and cognitive appraisal. This theory posits that physiological arousal is fairly uniform across different emotions, and it is the cognitive interpretation of the situation, or cognitive appraisal, that determines the type of emotion we experience. Therefore, when faced with a stimulus, our bodies respond with a generic physiological arousal, which we then interpret based on the context, leading to the specific emotion we feel.