Which of the Following Is True Regarding Stock Options

question 6

Multiple Choice

Which of the following is true regarding stock options?

• A)A loss is realized when stock options lapse.
• B)There is typically no tax effect on the grant date.
• C)Income recognized on the exercise date is greater for incentive stock options than nonqualified options.
• D)The bargain element on a nonqualified option is taxed to employees at capital gain rates.

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Definitions:

Point Bar

A depositional feature made of sand and gravel that forms on the inside bend of streams and rivers.

Erosional Features

Landforms created by the removal of soil, rock, or sediment through water, wind, ice, or other natural forces.

Radar Image

A representation of objects produced through the use of radio waves, often utilized in weather monitoring and mapping terrain.

Active Tectonics

The study of structural features within the Earth's crust and their movements, which are caused by the seismic and volcanic activity related to the movement of tectonic plates.