Marvin,the Vice President of Lavender,Inc

question 74

Multiple Choice

Marvin,the vice president of Lavender,Inc.,exercises stock options for 100 shares of stock in March 2011.The stock options are incentive stock options (ISOs) .Their exercise price is $20 and the fair market value on the date of exercise is $28.The options were granted in March 2008 and all restrictions on the free transferability had lapsed by the exercise date.

• A) If Marvin sells the stock in December 2011 for $3,000, his AMT adjustment in 2011 is a positive adjustment of $800.
• B) If Marvin sells the stock in December 2012 for $3,000, his AMT adjustment in 2012 is $0.
• C) If Marvin sells the stock in December 2011 for $3,000, his AMT adjustment in 2011 is a negative adjustment of $800.
• D) If Marvin sells the stock in December 2012 for $3,000, his AMT adjustment in 2012 is a negative adjustment of $1,000.
• E) None of the above.

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Definitions:

Backward Conditioning

A conditioning method where the unconditioned stimulus is presented before the conditioned stimulus, which is less common and generally less effective than forward conditioning.

Unconditioned Stimulus

In classical conditioning, a stimulus that naturally and automatically triggers a response without any learning needed.

Conditioned Stimulus

A previously neutral stimulus that, after becoming associated with an unconditioned stimulus, eventually triggers a conditioned response.

Interstimulus Interval

The duration of time between the end of one stimulus and the beginning of another.