Yvonne Exercises Incentive Stock Options (ISOs) for 100 Shares of Apple

question 71

Multiple Choice

Yvonne exercises incentive stock options (ISOs) for 100 shares of Apple Corporation stock at the option price of $100 per share on May 21, 2019, when the fair market value is $120 per share.She holds the stock for only two years and sells the shares for $115 per share.Determine the recognized gain on the sale and classify it as capital or ordinary.

• A)$2,000 ordinary income and $2,000 STCG.
• B)$2,000 ordinary income and $2,000 LTCG.
• C)$4,000 ordinary income.
• D)$1,500 LTCG.
• E)None of these.

Understand the impact of compounding frequency on future values.

Grasp the effect of discount rates on present and future values.

Understand how initial deposit amounts impact future savings goals.

Analyze the impact of interest rates on investment outcomes.