A grants an option to B under which B may purchase 100 shares of the stock of Y Corp. from A for $10 per share at any time within six months after the option is written. When the option is written B pays a premium of $50 to A. What are the consequences to A and B in the following:

a. B exercises the option when the stock is worth $14 per share by paying the option rice of $1000 to A. A conveys to B 100Y shares that she purchases at $10 per share when the option was granted

b. same as (a.), except that A purchases the stock years earlier for $5 per share.