$3.$ Cory has a participating whole life insurance policy with a face value of $$100,000,$ an annual premium of $$1,100,$ and an adjusted cost base $($ACB$)$ of $$300.$ The insurance company has just declared a dividend of $$500,$ for which Cory has elected the cash receipt option.

Which of the following will occur as a result?

i$)$ The ACB will be reduced to $$0$

ii$)$ The ACB will be increased to $$800$

iii$)$ Cory will have to declare $$500$ taxable income related to the dividend

iv$)$ Cory will have to declare $$200$ taxable income related to the dividend

a$)$ i$)$ and iii$)$

b$)$ i$)$ and iv$)$

c$)$ ii$)$ and iii$)$

d$)$ ii$)$ and iv$)$