In 2008, Mr Delgado Exercised an Option to Purchase 1,000

question 50

Multiple Choice

In 2008, Mr Delgado exercised an option to purchase 1,000 shares of his employer's stock for $29 per share when the market price was $65 per share. This year, Mr Delgado sold the stock for $80 per share. Which of the following statements is false?

• A) If the option was an ISO, Mr. Delgado recognized a $51,000 gain on sale.
• B) If the option was nonqualified, Mr. Delgado recognized a $15,000 gain on sale.
• C) If the option was an ISO, Mr. Delgado has a $36,000 AMT preference item this year.
• D) None of the above is false.

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Definitions:

Stress-related Decision

Decisions that are influenced or prompted by psychological stress, potentially affecting the outcome or process of making choices.

Primary Appraisal

The initial evaluation process in which an individual assesses whether an event is irrelevant, beneficial, or stressful to them.

Secondary Appraisal

The process of evaluating one's potential to cope with or respond to a threatened or challenging event after its significance has been assessed.

General Adaptation Syndrome

A three-stage response (alarm, resistance, exhaustion) to stress theorized by Hans Selye, illustrating how stress affects the body over time.