Which theory claims that individuals label emotions based on how they are interpreted?

A. Cannon-bard theory

B. James-Lange theory

C. relative deprivation principle

D. Schachter's two factor theory

The answer is D. Schachter's two factor theory.

Schacter's two factor theory on emotion places this theory in perspective by claiming that those people that identify emotions bases them according to the proclaimed trait that they exhibit. Hence, the physiological arousal and the cognitive labeling or description.