Financial swap markets have emerged in recent years because of the following reasons: . exchange rates fluctuate widely b. interest rates fluctuate widely c. forward markets may not function properly d. currency futures are available only for selected currencies e. all of the above

E. All of the above

Explanation:

Financial swap is a treaty between the two parties, sometimes called the counterparties, to exchange the prospective cash flow between themselves.

Financial swap emerges due to the fluctuation of the exchange rate and interest rates because the exchange rate and interest rates change from time to time which might create a problem for either the buyer or the seller. The forward market does not work correctly, and some currencies are not accessible in the foreign exchange. Therefore, all the answers are valid for the emergence of a financial swap.

due to the changes the federal reserve is making the unused reserves will impact the economy by them facing inflation. inflation is definfed as the increase in pricing of a good or service but the decline of the value of money used for purchasing those items. when the economy has a high inflation rate, they are subject to money loss and hurt on the economy.