Maren Received 10 NQOs (Each Option Gives Her the Right

question 86

Multiple Choice

Maren received 10 NQOs (each option gives her the right to purchase 10 shares of stock for $8 per share) at the time she started working when the stock price was $6 per share. When the share price was $15 per share, she exercised all of her options. Eighteen months later she sold all of the shares for $20 per share. What is the amount of Maren's bargain element?

• A) $0.
• B) $700.
• C) $900.
• D) $1,500.
• E) None of the choices are correct.

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Definitions:

Standard Error of Measurement

The range of scores where we would expect a person’s score to fall if he or she took the instrument over and over again—in other words, where a “true” score might lie. It is calculated by taking the square root of 1 minus the reliability and multiplying that number by the standard deviation of the desired score.

Median

A measure of central tendency that is the middle score, or the score for which 50% of scores fall above and 50% fall below. In a skewed curve or skewed distribution of test scores, the median is generally the most accurate measure of central tendency since it is not affected by unusually high or low scores.

Standard Error of Measurement (SEM)

The margin of error in an individual's score, representing the variability in scores if the test were administered multiple times.

Test-Retest Reliability

A measure of consistency where the same test administered to the same group of individuals at two different points in time produces similar results.