4(20 points) Money manager Boris Milkem deals with European currency (the dollar

Question

4(20 points) Money manager Boris Milkem deals with European currency (the dollar) At 12 midnight, he can buy euros by nay inge andthe num ying ouros perdollar. Let y the number of dollars bth (hy pay ing euros os boughi (b paying dollars) Assume that both pes of transactions take place simultancously, and currency tthe eure) and American can buy euros by paying 25 dollars per euro and dollars by constraint is that at l 201 A. M. Boris mint have a non negative nurnber of Euros and dollars. muae an ht enubles Horis to masimize the number of sollars he has after all ransactions are completed 2Graphically solve the LP and comment on the answer

Explanation / Answer

As per given scenario,
X1 = no.of dollars bought (for francs)
X2 = no.of francs bought (for dollars)

Constraints:
X1 - 0.25*X2 = 0 (dollar constraint)
-3*X1 + X2 = 0 (franc constraint)

To maximize the number of dollars, Max Z = X1 - 0.25*X2 = 0
--> Max Z = X1 = 0.25*X2 (LP Equation)

Subject to constraints, X1, X2 is greater or equal to 0

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