1. For all maturities the HK dollar (HKD) interest rate is 2% per annum and the Singapore dollar (SGD) rate is 3% per annum. The current value of the SGD is 5.8 HKD. In a swap agreement, a financial institution pays 3% per annum in SGD and receives 3% per annum in HKD. The principals in the two currencies are 10 million SGD and 55 million HKD. Payments are exchanged every year, with one exchange having just taken place. The swap will last 3 more years. What is the value of the swap to the financial institution? Assume all interest rates are continuously compounded.