3. How much income does Tracy recognize at exercise if she received 100 non-qualified stock options (NQSOs) with a $3 exercise price, when the stock was valued at $3, she exercised the option when the stock was worth $7 a share, and sold the shares for $9 three months after exercising the options? (A) $0 (B) $200 (C) $300 (D) $400 (E) $700 4. On the previous question, what is Tracy's cost basis after exercising the options? (A) SO (B) $200 (C) $300 (D) $400 (E) $700