The current price of a share of stock is $40 and 6-month European call options on the stock with an exercise price of $41 are currently selling for $4. An investor is trying to decide between buying 100 shares or buying 1,000 call options on the stock (10 contracts). Both strategies will involve investing $4,000.

a)Draw the profit/loss diagram for both strategies.

b) For what range of the stock price is the option strategy more profitable?