The current price of a stock is $40, and two-month European call options with a strike price of $43 currently sell for $5. An investor who feels that the price of the stock will increase is trying to decide between two strategies: buying 100 shares or buying 800 call options (8 contracts). Both strategies involve an investment of $4,000 a. Which strategy will earn more profits if the stock increases to $42? b. How high does the stock price have to rise for the option strategy to be more profitable? Please choose all correct answers. Please note that each incorrect answer wil reduce the score by 10%. 1If the stock closes at $42, buying100 shares will have a profit of $200 and buying 800 calls will have a loss of $3,000. So buying stocks w be better than buying options 2.The option strategy is more profitable if the stock price rises above $43.45 if the stock closes at $42, buying100 shares will have a profi of s200 and buying 800 calls will huave a loss of $4,000. So buying stocks wll be better than buying options 4.The option strategy is more profitable if the stock price goes below $47.94 S. The option strategy is more profitable if the stock price rises above 549.14 6 if the stock closes at $42, buying100 shares will have a profit of $200 and buying 800 calls will have a loss of $2,000 So buying stocks l be better than buying options itf the stock closes ar $42 buying 00 shares will haive a profie or $200 and buying 8000 cals will have a proft of $2000. So buying ca options will be better than buying stocks & The option strategy is more proftable if the stock price rises above $45.78 5 6 commandoption mmand