you live in the fantasy world where you think you can stretch a tire on a 16x7 inch wheel. Its not gonna happen toots.
get Falken 205/40's and call it a day, at least the sidewalls are molded in a psuedo stretch-type shape. I think you will be happiest with those, Conti's in 195/40 are blocky in the sidewalls and need at least an 8" wide wheel to begin to call it as you say... stretched.
as a side note you could get Dunlop SP9000's in 195/40 for a psuedo stretch sidewall but they are not common, have to come from Europe and definetly not readily available used.... Nor are they cheap. Toyo's tend to run big for their size so Im afraid their 195/40 offering will still be outclassed by the 205/40 Falken.