Jane is an employee of Oil Corp. She is granted a statutory stock option under the Oil Corp. employee stock purchase plan on January 31 at 88% of fair market value (FMV). She exercises the option on December 1 of the next year and sells the stock on December 2 of the following year at a price that is higher than the FMV when the option was granted. Which of the following statements is correct?

a) The difference between the grant price and FMV at date of grant would be ordinary income in the year the option is granted.

b) The difference between the grant price and FMV at date of grant would be ordinary income in the year the option is exercised.

c) The difference between the grant price and FMV at date of grant would be ordinary income in the year of sale.

d) The difference between the option price and Janes sale price, if higher, would be a capital gain.