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Which of the following statements concerning incentive stock option (ISO) is (are) correct?
1) An ISOs exercise price must be equal to or greater than 100 percent of the underlying stock's fair market value on the date of grant.
2) If an employee does not satisfy the ISO's holding period requirements , the gain to the extent of the spread at the time of exercise is taxed as ordinary income.
A) 1 only
B)2 only
C) both 1 and 2
D) Neither 1 or 2
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