The question$($s$)$ below are based on the following information:

Mr$.$ Morra commenced employment with Peoples Bank Ltd$.,$ a public corporation, on January $1,2021.$ On December $31,2021,$ he was granted options to purchase $500$ shares of Peoples Bank Ltd$.$ for $$15$ per share. The FMV of these shares on December $31,2021$ was $$16$ per share.

Mr$.$ Morra exercised all of the stock options on May $31,2022,$ purchasing $500$ shares for $$15$ per share when the FMV was $$17$ per share. On September $1,2023,$ Mr$.$ Morra sold the shares for $$24$ each.

What is the effect of the above transactions on Mr$.$ Morra's $2023$ taxable income?

An increase of $$1,750.$

An increase of $$3,500.$

Nil.

An increase of $$2,750.$