This is a busy day for you.

Another client has called you to discuss a conversation she overheard while at lunch the other day. The client heard one person say to another that they had decided that they were going to take $50,000 they got from an inheritance and buy bonds that are being issued by a new high-tech cell phone company, just starting-up, located in France. The bonds would be issued in Euros, pay 10% interest (7% more than government of Canada bonds currently pay), and would have a term to maturity of 25 years.

Your client then tells you that the other person, upon hearing this information, said to their friend: "Wow! From what you just told me, I can think of at least three financial risks you are facing if you go ahead with your investment plan. I'd be careful if I were you".

So, your client asks you what financial risks the other person was talking about.

Without knowing any specific details about the cell phone company's bond, or its issuer, you have some general thoughts that you want to share with your client.

(a) Identify three (3) financial risks the person does have to think about.

(b) Explain why you would also caution anyone about making such an investment.