a fixed-for-fixed currency swap was entered into by the magic corporation several years. the two currencies are the u.s. dollar and the euro. today there are three more years remaining on the life of the swap. the notional amount for the two currencies is $1,000,000 and €862,000. the currency swap requires that magic corporation pay 6.8% on the notional amount on $1,000,000 each year and receive 5.4% on the notional amount each year of the €862,000. cash flows in euros are discounted at 5% and cash flows in dollars are discounted at 5.7%. in the third year when principal payments are swapped, the exchange rate is expected to be such that 0.90 euros can be exchanged for $1.