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Explanation:

To be considered ‘interesting psychology’, the passage states that internal conflicts are essential. Bereft of internal conflicts a situation does not qualify to be psychologically interesting. In that case, the only example available in the options which includes internal conflict is in option 2.
Comparing the options, you notice that only in option 2 is there is a living adversary. Another clue is provided in option 4 – “the finance manager’s quandary” – in options 1, 3, and 4 they face confusion rather than ‘conflict’ – confusion cannot be equated with internal conflict – which is when, like in serious literature the adversary is not passive. In all three options the adversary is passive, and once the best choice is made (it may not be best owing to confusion) the ‘quandary’ ends. But in chess one understands that one’s choice triggers an array of options for the other, and the dynamism or unpredictability of the adversary’s reaction causes not confusion but ‘internal conflict”, which cannot end even after a choice is made.
Hence, the correct answer is option 2.

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