Advanced Placement (AP), 03.05.2021 22:30 laylahedwards

Two companies, Rothko, LLC, and Calder & Co., are racing each other to be the first to apply new deep-water drilling technologies to an oil deposit. If Rothko, LLC gets to the oil first, its stock will increase by 59 %, and Calder & Co.'s stock price will not change at all. If Calder & Co. gets to the oil deposit first, its stock price will increase by 41 %, and Rothko's stock price will not change at all. These are the only two companies trying to tap the deposit. The chance that Calder & Co. arrives first is 59 %. Round all answers should be to two decimal places.

A. What is the expected payoff, or rate of return, of investing $1000 in Rothko, LLC?
B. What is the expected payoff of investing the same amount in Calder & Co.?
C. What is the expected payoff of investing $500 in Calder & Co. and $500 in Rothko, LLC?

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Two companies, Rothko, LLC, and Calder & Co., are racing each other to be the first to apply new...