Nestor Receives the Right to Acquire 1,000 Shares of Knolls

question 86

Multiple Choice

Nestor receives the right to acquire 1,000 shares of Knolls Corporation stock through the company's incentive stock option plan. The fair market value of the stock at the date of the grant is $20 and the exercise price of the option is $24 per share. For the option to qualify as an incentive stock option
I.Nestor must exercise the option within 10 years of the date of grant.
II.Nestor must hold the stock for at least 2 years after the date of exercise before selling it.
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• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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Definitions:

Transparent Disc

A disc-shaped object made from a material that allows light to pass through it without scattering, making the material itself nearly invisible but still physically present.

Iris

The colored part of the eye that controls the size of the pupil and thus the amount of light that enters the eye.

Cornea

The clear front section of the eye, encompassing the iris, pupil, and front chamber, which plays a primary role in concentrating the majority of light entering the eye.

Retina

A thin layer of tissue at the back of the eye that contains cells sensitive to light, which convert light into neural signals for visual recognition.