What does the Inverted 'U' Hypothesis illustrate?

The Inverted 'U' Hypothesis illustrates the relationship between arousal and performance, highlighting that performance is optimal at a certain level of arousal. As arousal increases from low levels, performance improves until it reaches an optimal point. Beyond this point, further increases in arousal lead to a decline in performance. This means that both very low and very high levels of arousal can negatively impact an individual's performance. This framework is fundamental in understanding how athletes and performers can achieve their best results by managing their arousal levels appropriately.

The other options may touch upon related ideas but do not encapsulate the comprehensive nature of the Inverted 'U' Hypothesis. For example, while it is true that only optimal arousal leads to peak performance, it is the decline in performance at both low and high states that is central to the hypothesis's implications, making option B the most precise interpretation of this relationship.