The current price of a stock is $105, and three-month European call options with a strike

price of $107 currently sell for $5.20. An investor who feels that the price of the stock will

increase is trying to decide between buying 100 shares and buying 1,500 call options.

Both strategies involve an investment of $10,500. What advice would you give if the stock

price increased to $120? How high does the stock price have to rise for the option strategy

to be more profitable?