On January 31 of This Year, Jennifer Pays $700 for an Option

question 2115

Multiple Choice

On January 31 of this year, Jennifer pays $700 for an option to acquire 100 shares of Lifetime Corporation common stock for $70 per share. Jennifer exercises the option on June 2. Jennifer sells the stock on April 30 of next year for $10,000. Jennifer's basis for the stock immediately before the sale is

• A) $700.
• B) $7,700.
• C) $0.
• D) $7,000.

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Definitions:

Radial Cleavage

The pattern of blastomere production in which the cells are located directly above or below one another; characteristic of early deuterostome embryos. Compare with spiral cleavage.

Abdominal Cavity

A body cavity in vertebrates that houses many organs, enclosed by the abdominal muscles and containing the stomach, intestines, liver, and other organs.

Coelom

A fluid-filled body cavity between the intestinal canal and the body wall in most bilateral animals, housing organs.

Pseudocoelom

A body cavity between the mesoderm and endoderm; derived from the blastocoel. Compare with coelom.